The primary physiological significance of cytochrome P450c27 (CYP27) has been associated with its role in the degradation of the side chain of C27 steroids in the hepatic bile acid biosynthesis pathway, which begins with 7alpha-hydroxylation of cholesterol in liver. However, recognition that in humans P450c27 is a widely or ubiquitously expressed mitochondrial P450, and that there are alternative pathways of bile acid synthesis which begin with 27-hydroxylation of cholesterol catalyzed by P450c27, suggests the need to reevaluate the role of this enzyme and its catalytic properties. 27-Hydroxycholesterol was thought to be the only product formed upon reaction of P450c27 with cholesterol. However, the present study demonstrates that recombinant human P450c27 is also able to further oxidize 27-hydroxycholesterol giving first an aldehyde and then 3beta-hydroxy-5-cholestenoic acid. Kinetic data indicate that in a reconstituted system, after 27-hydroxycholesterol is formed from cholesterol, it is released from the P450 and then competes with cholesterol for reentry the enzyme active site for further oxidation. Under subsaturating substrate concentrations, the efficiencies of oxidation of 27-hydroxycholesterol and 3beta-hydroxy-5-cholestenal to the acid by human P450c27 are greater than the efficiency of hydroxylation of cholesterol to 27-hydroxycholesterol indicating that the first hydroxylation step in the overall conversion of cholesterol into 3beta-hydroxy-5-cholestenoic acid is rate-limiting. Interestingly, 3beta-hydroxy-5-cholestenoic acid was found to be further metabolized by the recombinant human P450c27, giving two monohydroxylated products with the hydroxyl group introduced at different positions on the steroid nucleus.