The carcinogenicity and mutagenicity of various chromium compounds have been found to be markedly dependent on the oxidation state of the metal. The carcinogen chromate was reduced to chromium(III) by rat liver microsomes in vitro. Metabolism of chromate by microsomal enzymes occurred only in the presence of either NADPH or NADH as cofactor. The chromium(III) generated upon metabolism formed a complex with the NADP(+) cofactor. Significant binding of chromium to DNA occurred only when chromate was incubated in the presence of microsomes and NADPH. Specific inhibitors of the mixed function oxidase enzymes, 2'-AMP, metyrapone, and carbon monoxide, inhibited the rate of reduction of chromate by microsomes and NADPH. The possible relationship of metabolism of chromate and its interaction with nucleic acids to its carcinogenicity and mutagenicity is discussed.