An NADPH-dependent microsomal-activating system has been coupled to a rat embryo culture in vitro. No embryonic morphological abnormalities or decrease in final yolk sac or embryo DNA and protein contents occurred when 0.2 mM NADPH was used in this coupled system. In contrast, 1.0mM NADPH alone, or 0.2mM NADPH in the presence of microsomes and a glucose-6-phosphate dehydrogenase-based NADPH-generating system, greatly reduced embryo and yolk sac growth in vitro. The toxicity of NADPH was not due to lipid peroxidation. Only minor decreases in final yolk sac protein levels occurred when embryos were grown in media containing male rat microsomes and 1.0mM NADPH. The protective effect of rat hepatic microsomes on NADPH toxicity does not seem to have been due to the oxidation of NADPH to the less toxic NADP. Although cyclophosphamide alone was not toxic to rat embryos cultured in vitro, in the coupled microsomal-activating/embryo culture system, cyclophosphamide reduced yolk sac and embryo growth and caused abnormal embryonic differentiation. The uses of the coupled microsomal-activating/embryo culture system to study mechanisms in anomalous development as well as its possible use in embryo toxicity and teratogenicity testing, are discussed.