Treatment of Sarcina lutea with lysozyme followed by sonication yields a cell-free preparation capable of incorporating fatty acids into hydrocarbons. Coenzyme A, Mg2+, ATP, NADPH, and either pyridoxal phosphate or pyridoxamine phosphate were required for maximum incorporation of palmitate into hydrocarbon. At concentrations of 1.5 × 10-5 M, pyridoxamine phosphate gave twice the incorporation obtained with pyridoxal phosphate. The participation of the coenzyme A derivative of the fatty acid was consistent with the requirement for the first three cofactors, and in agreement with this, palmitoyl coenzyme A was incorporated into hydrocarbons at over 20 times the rate of the free acid in the absence of coenzyme A. The carboxyl carbon of palmitoyl coenzyme A was incorporated into hydrocarbons to only a limited extent, and the pyridoxal derivative appeared to function as a cofactor in the incorporation of fatty acids or their derivatives by a mode not involving decarboxylation. The relevance of these findings to a proposed mechanism of hydrocarbon biosynthesis in which the aliphatic group of a vinyl ether is transferred to the α-carbon of a fatty acid derivative which undergoes decarboxylation is discussed. Optimum incorporation of fatty acids into hydrocarbons was obtained at pH 8. The time course for incorporation and the dependence of the rate of incorporation on substrate and cell preparation concentrations are reported. Data on inhibitor studies of the system that further define cofactor requirements and suggest relationships to the synthesis of hydrocarbons in plant systems are presented and discussed. © 1969, American Chemical Society. All rights reserved.