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Cultured fibroblasts were shown to be capable of catalyzing the conversion of 7 alpha-hydroxy-cholesterol to 7 alpha-hydroxy-4-cholesten-3-one, an important reaction in bile acid synthesis. The apparent Km was approximately 7 mumol/liter and Vmax varied between 3 and 9 nmol/mg protein per h under the assay conditions used. The assay was used to investigate fibroblasts from a patient who presented with a familial giant cell hepatitis and who was found to excrete the monosulfates of 3 beta, 7 alpha-dihydroxy-5-cholenoic acid and 3 beta, 7 alpha, 12 alpha-trihydroxy-5-cholenoic acid in urine (Clayton, P. T., J. V. Leonard, A. M. Lawson, K. D. R. Setchell, S. Andersson, B. Egestad, and J. Sjövall. 1987. J. Clin. Invest. 79:1031-1038). In addition 7 alpha-hydroxy-cholesterol was found to accumulate in the circulation. Cultured fibroblasts from this boy were completely devoid of 3 beta-hydroxy-delta 5-C27-steroid dehydrogenase/isomerase activity. Fibroblasts from his parents had reduced activity, compatible with a heterozygous genotype. The results provide strong evidence for the suggestion that this patient's liver disease was caused by a primary defect in the 3 beta-hydroxy-delta 5-C27-steroid dehydrogenase/isomerase involved in bile acid biosynthesis.