The 7 alpha-dehydroxylation of primary bile acids by Eubacterium sp. V.P.I. 12708 required a cell extract prepared from a cholic acid-induced culture and NAD+. NADH (0.5 mM) inhibited bile acid 7-dehydroxylase activity more than 50% when added to reaction mixtures containing NAD+ (0.5 mM). Saturation kinetics and double reciprocal plots of NADH inhibition were consistent with negative cooperativity. 7-Dehydroxylase activity was modulated by the molar ratio of NAD+-NADH with maximal activity at a NAD+ mole fraction of 0.75 to 0.85. NADH stimulated 7-dehydroxylase activity (30% to 50%) at low concentration (less than 0.15 mM) and inhibited at higher concentrations. Reduction of the proposed delta 6-intermediate (3 alpha-hydroxy-5 beta-6-cholen-24-oic acid) to lithocholic acid required a cell extract from a cholic acid-induced culture and was stimulated by the addition of NAD+. Reduced flavin nucleotides stimulated (32% to 62%) and NADH (0.5 mM) inhibited (78%) the reduction of the delta 6-intermediate to lithocholic acid. 7-Dehydroxylase was highly specific for bile acid substrates and required a free C-24 carboxyl group and an unhindered 7 alpha- or 7 beta-hydroxy group on the B-ring of the steroid nucleus for activity. Bile acid 7 alpha- and 7 beta-dehydroxylase and delta 6-reductase activities all co-eluted from an anaerobic high performance liquid chromatography gel filtration column. However, approximately 80% to 96% of the total units of activity were lost. A substantial portion (20% to 30%) of the total activity was recovered when material from low molecular weight (8,000 to 14,000 Mr) eluting fractions was added back to fractions containing enzyme activity. These studies show that 7-dehydroxylase is highly specific for substrates and its activity may be regulated by the NAD+-NADH ratio in the bacterial cell.