In the final reaction of peroxisomal alpha-oxidation of 3-methyl-branched fatty acids a 2-hydroxy-3-methylacyl-CoA intermediate is cleaved to formyl-CoA and a hitherto unidentified product. The release of formyl-CoA suggests that the unidentified product may be a fatty aldehyde. When purified rat liver peroxisomes were incubated with 2-hydroxy-3-methylhexadecanoyl-CoA 2-methylpentadecanal was indeed formed. The production rates of formyl-CoA (measured as formate) and of the aldehyde were in the same range. While the production of formate remained unaltered in the presence of NAD+, the amount of 2-methylpentadecanal was decreased, which was accompanied by the formation of 2-methylpentadecanoic acid. These data indicate that (1) during alpha-oxidation the 2-hydroxy-3-methylacyl-CoA is cleaved to a 2-methyl-branched aldehyde and formyl-CoA and (2) liver peroxisomes are capable of converting this aldehyde to a 2-methyl-branched fatty acid.