The capability of cyclodextrins (CDs) to greatly enhance the solubility in water of poorly water-soluble substances makes them an ideal alternative system for studying the expression of enzyme activity with such substrates in aqueous solution. In order to evaluate the behaviour of the enzymes in presence of CDs a study of the lipoxygenase (LOX)-catalyzed oxidation of polyunsaturated fatty acids (PUFA) as model reaction has been carried out. This was done by using LOX from two different sources (soybean and potato tuber), at two pH values (6.3 and 9.0), with two substrates (linoleic acid and arachidonic acid) and three types of CD (beta-CD, methyl-beta-CD and monoglucosyl-beta-CD). PUFA have been shown to form inclusion complexes of 1:2 stoichiometry which are in equilibrium with free PUFA and free CD, thus complexation is governed by two equilibrium constants, K1 and K2 (J.M. López-Nicolás et al., Biochem. J. 308 (1995) 151-154; R. Bru et al., Colloids Surf. 97 (1995) 263-269). For the oxidation of PUFA by LOX in the presence of beta-CD we propose a model in which free PUFA is the only effective substrate, thus the oxidation of the complexed substrate requires the previous dissociation of the complex. The equilibrium constants of complex formation are determined by both a physico-chemical and an enzymatic method. In spite of giving quite similar results, the second was proven to be more accurate so it was employed in further studies. CD was shown to slow down the reaction rate of LOX, specifically due to the increase of Km, Vmax remaining unchanged. That apparent inhibition is due to removal of effective (free) substrate in the form of inclusion complexes. This 'sequestered' substrate can, however, be converted since it is in equilibrium with the free. The feasibility of realizing a CD-mediated accurate control over the conversion rate is demonstrated in the experiment called 'cyclodextrin assay' in which the concentration of the free substrate is calculated by using the equilibrium constants of complex formation and setting the initial concentrations of total substrate and total CD. From the observation of the reaction progress curves in the conditions of the CD assay, we have studied some characteristic parameters of the oxidation of PUFA by LOX in this new medium, such as enzymatic activity, duration of linear product accumulation and the lag phase.