D-Amino acid oxidase activity was demonstrated in peroxisomes of rat liver using unfixed cryostat sections and a histochemical technique using cerium ions as capture reagent for hydrogen peroxide and diaminobenzidine, cobalt ions and exogenous hydrogen peroxide to visualize the final reaction product for light microscopical analysis. Cytophotometric analysis of liver sections revealed similar zero-order reaction velocities of D-amino acid oxidase with activity twice as high in periportal areas as in pericentral areas of liver lobuli when using either D-proline or D,L-thiazolidine-2-carboxylic acid as substrates. On the other hand, a 4-5 times higher KM value was found for D-proline than for D,L-thiazolidine-2-carboxylic acid. The KM values in periportal and pericentral areas were similar for each substrate. These findings support the suggestion that the physiological substrate for D-amino acid oxidase may be D,L-thiazolidine-2-carboxylic acid, the adduct of cysteamine and glyoxylic acid. D-Amino acid oxidase may play a role in vivo in the production of oxalate which may participate in metabolic control processes as an intracellular messenger molecule.