The metabolism and genotoxicity of the carcinogenic mycotoxin, aflatoxin B1 (AFB), was studied in the lower eukaryotic yeast Saccharomyces cerevisiae. Recombinant strains of yeast were engineered to express human cDNAs for CYP1A1, CYP1A2, and microsomal epoxide hydrolase (mEH). Coexpression of mEH with CYP1A1 or CYP1A2 resulted in significant decreases in measurements of AFB genotoxicity. In cells expressing CYP1A2 and mEH, the level of AFB-DNA adducts was decreased by 50% relative to cells expressing CYP1A2 alone. Mitotic recombination, as assayed by gene conversion at the trp5 locus, was diminished by 50% or greater in cells coexpressing mEH and CYP1A2 compared to CYP1A2 alone. The mutagenicity of AFB in the Ames assay was also decreased by approximately 50% when AFB was incubated with microsomes containing CYP1A1 or CYP1A2 and mEH versus CYP1A1 or CYP1A2 alone. The biotransformation of AFB by CYPs is known to involve the generation of a reactive epoxide intermediate, AFB-8,9-epoxide, but previous direct biochemical and kinetic studies have failed to demonstrate any functional role for mEH in AFB detoxification. By reconstructing a metabolic pathway in intact yeast, we have shown, for the first time, that mEH may play a role in mitigating the carcinogenic effects of AFB.