The effects of polychlorinated biphenyls (PCBs) and polybrominated biphenyls (PBBs) on the formation in vitro of aflatoxin Q1 and aflatoxin M1 from aflatoxin B1 by rat-liver microsomes were investigated. AFB1 metabolism by hepatic microsomes from PBB- and PCB-treated rats resulted in 16- and 30-fold increases, respectively, in levels of aflatoxin M1. The enhanced formation of aflatoxin M1 did not correlate with PBB and PCB stimulation of benzo[a]pyrene hydroxylase (AHH) activity. Studies in vivo clearly demonstrated enhanced secretion of aflatoxin M1 by female lactating rats with prior exposure to PCBs. PCB pretreatment enhanced the activity of mammary as well as hepatic tissue microsomal preparations in converting aflatoxin B1 to aflatoxin M1. Our findings indicate that PCB exposure increases the production of aflatoxin M1 in vitro and also increases the levels of aflatoxin M1 released into the milk.