The infusion of a closely related derivative of bilirubin, its dimethyl diester (DME), into jaundiced (jj) Gunn rats was associated with biliary excretion of mono-and diglucuronides of bilirubin. In vitro incubation of DME with liver microsomes from jj rats demonstrated sequential demethylation and glucuronidation of DME. Liver microsomes from a patient with the Crigler-Najjar syndrome were unable to form glucuronides of bilirubin in vitro unless DME was used as substrate. The results suggest that the deficiency in Gunn rats and in the Crigler-Najjar syndrome may be due to a structural defect in the microsomal matrix which contains glucuronyl transferase. This interpretation envisions a microenvironment of the transferase enzyme which is either impermeable to bilirubin or induces conformational changes which interfere with glucuronidation.