FETAX (frog embryo teratogenesis assay: Xenopus) is a 96-hr teratogenesis screening assay using embryos of the South African clawed frog, Xenopus laevis. Since Xenopus embryos have limited xenobiotic metabolism through 96 hr of development, we have developed an in vitro metabolic activation system employing Aroclor 1254-induced rat liver microsomes. By adding an exogenous source of mixed functional oxidase (MFO) activity, we may more accurately assess the teratogenic risk of proteratogenic compounds. Xenopus embryos were cocultured with varying concentrations of cyclophosphamide (CP), Aroclor 1254-induced microsomal protein, an NADPH-generating system, and antibiotics in a static renewal fashion for 96 hr. Residual Aroclor 1254 remaining in the microsomes was successfully reduced during purification to levels that had no significant effect on embryo survival and development. The results of three definitive dose-response tests performed with CP revealed that activation reduced the 96 hr LC50 from 8.0 to 1.4 mg/ml (5.7-fold). The 96-hr EC50 (malformation) was reduced from 6.2 to 0.4 mg/ml (15.5-fold). Activation also increased the types and severity of malformation and reduced embryonic growth. Aroclor 1254-induced rat liver microsomes may be used as an acceptable in vitro metabolic activation system for FETAX.