According to current views, peroxisomal beta-oxidation is organized as two parallel pathways: the classical pathway that is responsible for the degradation of straight chain fatty acids and a more recently identified pathway that degrades branched chain fatty acids and bile acid intermediates. Multifunctional protein-2 (MFP-2), also called d-bifunctional protein, catalyzes the second (hydration) and third (dehydrogenation) reactions of the latter pathway. In order to further clarify the physiological role of this enzyme in the degradation of fatty carboxylates, MFP-2 knockout mice were generated. MFP-2 deficiency caused a severe growth retardation during the first weeks of life, resulting in the premature death of one-third of the MFP-2(-/-) mice. Furthermore, MFP-2-deficient mice accumulated VLCFA in brain and liver phospholipids, immature C(27) bile acids in bile, and, after supplementation with phytol, pristanic and phytanic acid in liver triacylglycerols. These changes correlated with a severe impairment of peroxisomal beta-oxidation of very long straight chain fatty acids (C(24)), 2-methyl-branched chain fatty acids, and the bile acid intermediate trihydroxycoprostanic acid in fibroblast cultures or liver homogenates derived from the MFP-2 knockout mice. In contrast, peroxisomal beta-oxidation of long straight chain fatty acids (C(16)) was enhanced in liver tissue from MFP-2(-/-) mice, due to the up-regulation of the enzymes of the classical peroxisomal beta-oxidation pathway. The present data indicate that MFP-2 is not only essential for the degradation of 2-methyl-branched fatty acids and the bile acid intermediates di- and trihydroxycoprostanic acid but also for the breakdown of very long chain fatty acids.