N-Substituted aromatic compounds can be metabolized in most species to N-acetylated derivatives that are themselves subject to further enzymatic transformations, including hydrolysis and N,O-acyltransfer. These proceses can either potentiate or ameliorate the biological responses to these N-substituted derivatives. Decreasing the levels of metabolites, such as arylhydroxylamines may, in some systems, reduce the probability of eliciting adverse biological effects. In others, arylhydroxamic acids produced by the acetylation of arylhydroxylamines may increase their potential for metabolic activation by N,O-acyltransfer. In the rabbit, rat and perhaps other species, the acetyl CoA-dependent N-acetyltransferase is also capable of activating arylhydroxamic acids by N-O-acyltransfer. These cytosolic organotriphosphate ester-resistant enzymes can utilize arylhydroxamic acid as a donor of the acetyl moiety in the acetyl transferase reaction and apparently are capable of activating arylhydroxamic acids because of their ability to O-acetylate the arylhydroxlamine. In mice, N-acetyltransferase and N,O-acetyltransferase seem not to exhibit this relationship. Enzymes from the microsomes of a number of species are also capable of activating arylhydroxamic acids. The particulate-bound enzymes are organotriphosphate ester-sensitive deacylases that are unable to form nucleic acid adducts on incubation with N-methoxy-N-acetylaminoarenes, substrates that are not capable of activation by N,O-acyltransfer. Thus, depending on the specificity of the enzymes involved, N-substituted aromatic compounds may be activated by N,O-acyltransfer during both the acetylation and deacylation process. The influence of this activation in the carcinogenic process is the object of continuing investigation.