When PCA16, a metabolite of the cytosine arabinoside prodrug YNKO1, was incubated with isolated rat hepatocytes, time-dependent H2O2 generation was found. When the hepatocytes obtained from clofibrate-treated rat liver were used as an enzyme source, PCA16-dependent production of H2O2 was increased by around 6-fold. The activity of peroxisomal beta-oxidation for PCA16 assayed by H2O2 generation was 3-fold higher than that for palmitic acid, whereas the activity of mitochondrial beta-oxidation for PCA16 assayed by ketone body production was much less than that for palmitic acid. A subcellular distribution study revealed that the distribution of the activities of beta-oxidation and fatty acyl-CoA oxidase for PCA16-CoA coincided with those of cyanide-insensitive palmitoyl-CoA-dependent beta-oxidation and catalase, a marker enzyme of peroxisomes. The profile of the cofactor requirement for beta-oxidation of PCA16-CoA in isolated peroxisomes was similar to that for palmitoyl-CoA oxidation, and the reaction was not inhibited by KCN. The formation of CoA derivative prior to beta-oxidation reaction was essential. HPLC analysis of metabolites after incubation of PCA16-CoA with isolated peroxisomes demonstrated the production of four metabolites, two of which were identified as PCA14 and PCA12 by fast atomic bombardment-mass spectrometry. These results indicate that peroxisomal beta-oxidation participates in the shortening of the alkyl-side chain of PCA16 and plays an important role in the formation of antileukemic cytosine arabinoside from YNKO1.