Rat liver microsomal fraction generates 14CO2 from [1(-14)C]glucose 6-phosphate in the presence of NADP+ and a detergent. The activity is mediated through an enzyme system consisting of hexose-6-phosphate dehydrogenase and 6-phosphogluconate dehydrogenase inherent to the microsomes, with the latter enzyme reaction being a rate-determining step. Both enzymes of the system in microsomes are extremely resistant to trypsin digestion, thereby distinguishing them from the corresponding cytosol enzymes. A stoichiometric relationship was obtained between the generations of NADPH and 14CO2 (2: 1 on a molar basis), indicating that the observed generation of NADPH in microsomes could entirely be accounted for by the action of the enzyme system. A method was devised to measure NADP(H) inside or outside the microsomal vesicles, and it was found that a considerable amount of the cofactor was present within the vesicles. Subfractionation of various intracellular fractions on sucrose density gradients confirmed the close association of NADP(H) with liver microsomes. It is suggested that both enzymes of the system function to generate the reduced form of NADP+ in the luminal space of the endoplasmic reticulum, where NADP(H) and glucose 6-phosphate are available.