Bioactivation of diaziquone (AZQ) in HT-29 human colon carcinoma cells and detoxification of benzene metabolites in bone marrow stromal cells were used as examples of the potential role of DT-diaphorase in both activation and deactivation processes. HT-29 cell cytosol contained high levels of DT-diaphorase activity and removed AZQ in the presence of either NADH or NADPH. Prior boiling of cytosol, omission of NADH or NADPH or inclusion of dicoumarol, an inhibitor of DT-diaphorase, inhibited removal of AZQ. AZQ-induced cytotoxicity in HT-29 cells was also inhibited by dicoumarol. Chemical reduction of AZQ in a cell free system enhanced formation of a GSH conjugate of AZQ. Two of the major cell types in bone marrow stroma are macrophages and fibroblastoid stromal cells. A fibroblastoid cell line derived from stromal cells contained approximately fourfold higher levels of DT-diaphorase than macrophages. Inclusion of dicoumarol in incubations containing 14C-hydroquinone and the respective stromal cell type, significantly increased covalent binding of radiolabel to macromolecules in stromal fibroblasts but not in macrophages.