The objective was to study the effects of halothane, a volatile anesthetic, on hepatic metabolism of a second volatile anesthetic, methoxyflurane, and to correlate these biochemical findings with hepatic morphological changes. Microsomal fractions isolated from rats treated with halothane and from control animals were assayed for their capacity to dechlorinate methoxyflurane. Microsomes from halothane-treated rats demonstrated about 2.6 times the capacity to dechlorinate methoxyflurane as microsomes from control animals. Electron microscopy showed that liver cells from halothane-treated animals, when compared with hepatocytes from control rats, had increased amounts of smooth endoplasmic reticulum, an increased number of lipid droplets, and more microbodies per cell. Rough endoplasmic reticulum and glycogen were decreased by halothane treatment. We interpret these results to mean that halothane induces the rough endoplasmic reticulum to synthesize enzymes required for the biotransformation of methoxyflurane. It is suggested that these enzymes are placed in membranes of the rough endoplasmic reticulum. This organelle is converted to smooth endoplasmic reticulum and here the biotransforming enzymes function to dechlorinate methoxyflurane.