The infusion of a closely related derivative of bilirubin, its dimethyl diester (DME), into jaundiced (jj) Gunn rats was associated with biliary excretion of mono‐and diglucuronides of bilirubin. In vitro incubation of DME with liver microsomes from jj rats demonstrated sequential demethylation and glucuronidation of DME. Liver microsomes from a patient with the Crigler‐Najjar syndrome were unable to form glucuronides of bilirubin in vitro unless DME was used as substrate. The results suggest that the deficiency in Gunn rats and in the Crigler‐Najjar syndrome may be due to a structural defect in the microsomal matrix which contains glucuronyl transferase. This interpretation envisions a microenvironment of the transferase enzyme which is either impermeable to bilirubin or induces conformational changes which interfere with glucuronidation.