A broad range of epoxyalkanes was converted into the corresponding ketones by cell extracts of Xanthobacter Py2. Both 1,2- and 2,3-epoxyalkanes were degraded and in addition, the degradation of 2,3-epoxyalkanes in all cases was highly enantioselective. Conversion of a deuterium-labelled substrate indicated that the ketone product was probably formed indirectly via an hydroxy intermediate. Degradation of epoxyalkanes by Xanthobacter Py2 was dependent on both NAD and another, not yet identified, cofactor that was present in the low-molecular-mass fraction (LMF) of propene-grown cells. It is proposed that the LMF was involved in a reductive reaction step since it could be replaced by dithiothreitol (DTT) and various other dithiol compounds. Epoxyalkane-degrading activity was inhibited by the sulphhydryl blocking reagent N-ethylmaleimide (NEM). Inhibition by NEM and stimulation by LMF, DTT and other dithiols was effective only in the simultaneous presence of NAD.