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Cytochrome P450 (P450) 7A1 is well known as the cholesterol 7α-hydroxylase, the first enzyme involved in bile acid synthesis from cholesterol. The human enzyme has been reported to have the highest catalytic activity of any mammalian P450. Analyses of individual steps of cholesterol 7α-hydroxylation reaction revealed several characteristics of this reaction: (i) two-step binding of cholesterol to ferric P450, with an apparent K(d) of 0.51 μM, (ii) a rapid reduction rate in the presence of cholesterol (∼10 s(-1) for the fast phase), (iii) rapid formation of a ferrous P450-cholesterol-O(2) complex (29 s(-1)), (iv) the lack of a non-competitive kinetic deuterium isotope effect, (v) the lack of a kinetic burst, and (vi) the lack of a deuterium isotope effect when the reaction was initiated with the ferrous P450-cholesterol complex. A minimum kinetic model was developed and is consistent with all of the observed phenomena and the rates of cholesterol 7α-hydroxylation and H(2)O and H(2)O(2) formation. The results indicate that the first electron transfer step, although rapid, becomes rate-limiting in the overall P450 7A1 reaction. This is a different phenomenon compared with other P450s that have much lower rates of catalysis, attributed to the much more efficient substrate oxidation steps in this reaction.