Studies were performed to elucidate the mechanism responsible for the reduction in Km values of UDP-glucuronosyltransferase 2B7 (UGT2B7) substrates observed for incubations conducted in the presence of albumin. Addition of bovine serum albumin (BSA) and fatty acid-free human serum albumin (HSA-FAF), but not "crude" HSA, resulted in an approximate 90% reduction in the Km values for the glucuronidation of zidovudine (AZT) by human liver microsomes (HLM) and UGT2B7 and a 50 to 75% reduction in the S50 for 4-methylumbelliferone (4MU) glucuronidation by UGT2B7, without affecting Vmax. Oleic, linoleic, and arachidonic acids were shown to be the most abundant unsaturated long-chain fatty acids present in crude HSA and in the membranes of HLM and human embryonic kidney (HEK)293 cells, and it was demonstrated that these and other unsaturated long-chain fatty acids were UGT2B7 substrates. Glucuronides with Rf (retention factor) values corresponding to the glucuronides of linoleic and arachidonic acid were detected when HLM and HEK293 cell lysates were incubated with radiolabeled cofactor, and the intensity of the bands was modulated by the presence of crude HSA (increased) and BSA or HSA-FAF (decreased). Oleic, linoleic, and arachidonic acid inhibited AZT and 4MU glucuronidation by HLM and/or UGT2B7, due to an increase in Km/S50 without a change in Vmax. Addition of BSA and HSA-FAF reversed the inhibition. Likewise, coexpression of UGT2B7 and HSA in HEK293 cells reduced the Km/S50 values of these substrates. It is postulated that BSA and HSA-FAF sequester inhibitory fatty acids released during incubations, and the apparent high Km values observed for UGT2B7 substrates arise from the presence of these endogenous inhibitors.