UNLABELLED: Bile acid-coenzyme A:amino acid N-acyltransferase (BAAT) is the sole enzyme responsible for conjugation of primary and secondary bile acids to taurine and glycine. Previous studies indicate a peroxisomal location of BAAT in peroxisomes with variable amounts up to 95% detected in cytosolic fractions. The absence or presence of a cytosolic pool of BAAT has important implications for the intracellular transport of unconjugated/deconjugated bile salts. We used immunofluorescence microscopy and digitonin permeabilization assays to determine the subcellular location of endogenous BAAT in primary human and rat hepatocytes. In addition, green fluorescent protein (GFP)-tagged rat Baat (rBaat) and human BAAT (hBAAT) were transiently expressed in primary rat hepatocytes and human fibroblasts. Catalase and recombinant GFP-SKL and DsRed-SKL were used as peroxisomal markers. Endogenous hBAAT and rBaat were found to specifically localize to peroxisomes in human and rat hepatocytes, respectively. No significant cytosolic fraction was detected for either protein. GFP-tagged hBAAT and rBaat were efficiently sorted to peroxisomes of primary rat hepatocytes. Significant amounts of GFP-tagged hBAAT or rBaat were detected in the cytosol only when coexpressed with DsRed-SKL, suggesting that hBAAT/rBaat and DsRed-SKL compete for the same peroxisomal import machinery. When expressed in fibroblasts, GFP-tagged hBAAT localized to the cytosol, confirming earlier observations. CONCLUSION: hBAAT and rBaat are peroxisomal enzymes present in undetectable amounts in the cytosol. Unconjugated or deconjugated bile salts returning to the liver need to shuttle through the peroxisome before reentering the enterohepatic circulation.