According to current views, the second peroxisomal beta-oxidation pathway is responsible for the degradation of the side chain of bile acid intermediates. Peroxisomal multifunctional enzyme type 2 [peroxisomal multifunctional 2-enoyl-CoA hydratase/(R)-3-hydroxyacyl-CoA dehydrogenase; MFE-2] catalyses the second (hydration) and third (dehydrogenation) reactions of the pathway. Deficiency of MFE-2 leads to accumulation of very-long-chain fatty acids, 2-methyl-branched fatty acids and C(27) bile acid intermediates in plasma, but bile acid synthesis is not blocked completely. In this study we describe an alternative pathway, which allows MFE-2 deficiency to be overcome. The alternative pathway consists of alpha-methylacyl-CoA racemase and peroxisomal multifunctional enzyme type 1 [peroxisomal multifunctional 2-enoyl-CoA hydratase/(S)-3-hydroxyacyl-CoA dehydrogenase; MFE-1]. (24E)-3alpha,7alpha,12alpha-Trihydroxy-5beta-cholest-24-enoyl-CoA, the presumed physiological isomer, is hydrated by MFE-1 with the formation of (24S,25S)-3alpha,7alpha,12alpha,24-tetrahydroxy-5beta-cholestanoyl-CoA [(24S,25S)-24-OH-THCA-CoA], which after conversion by a alpha-methylacyl-CoA racemase into the (24S,25R) isomer can again be dehydrogenated by MFE-1 to 24-keto-3alpha,7alpha,12alpha-trihydroxycholestanoyl-CoA, a physiological intermediate in cholic acid synthesis. The discovery of the alternative pathway of cholesterol side-chain oxidation will improve diagnosis of peroxisomal deficiencies by identification of serum 24-OH-THCA-CoA diastereomer profiles.