Eubacterium species V.P.I. 12708 has inducible bile acid 7-dehydroxylase activity that can use either 7 alpha or 7 beta bile acids as substrates. Cell extracts prepared from bacteria grown in the presence of cholic acid catalyzed the rapid conversion of free bile acids into a highly polar bile acid metabolite (HPBA). This conjugation activity co-eluted with bile acid 7-dehydroxylase activity on high performance gel filtration chromatography (GFC). The HPBA was purified by a combination of high performance GFC and reverse-phase high performance liquid chromatography (HPLC). The intact HPBA eluted earlier from reverse-phase HPLC than deoxycholyl-CoA and had a Mr of 1102 by Bio-Gel P-2 (GFC). The HPBA had an absorption peak at 255 nm and was sensitive to treatment with phosphodiesterase I or nucleotide pyrophosphatase. The HPBA has a free phosphate as shown by an increase in elution volume on reverse-phase HPLC following treatment with alkaline phosphatase. Treatment of the purified HPBA with nucleotide pyrophosphate plus alkaline phosphatase yielded adenosine, whereas, treatment with nucleotide pyrophosphatase alone generated 5',3'-ADP. A bile acid metabolite was also generated by nucleotide pyrophosphatase treatment. The bile acid metabolite had different chromatographic properties (HPLC and TLC) than the corresponding free bile acid. Gas liquid chromatography-mass spectrometry showed the bile acid metabolite to be 12 alpha-hydroxy-3-oxo-4-cholenoic acid. We hypothesize that the HPBA is an intermediate in 7-dehydroxylation and consists of this compound linked at the C-24 with an anhydride bond to the beta phosphate (5') of ADP-3'-phosphate. These results suggest a novel mechanism of bile acid 7 alpha/7 beta-dehydroxylation in Eubacterium sp. V.P.I. 12708.