NAD(P)H: quinone oxidoreductase (NQO₁) is believed to be protective against cancer and toxicity caused by exposure to quinones and their metabolic precursors. This enzyme catalyzes the two‐electron reduction of compounds, compared with one‐electron reduction mediated by NADPH: cytochrome‐P450 oxidoreductase which produces toxic and mutagenic free radicals. Recently we cloned and sequenced the cDNA encoding human 2,3,7,8‐tetrachlorodibenzo‐p‐dioxin (dioxin)‐inducible cytosolic NQO₁ [Jaiswal et al. (1988) J. Biol. Chem. 263, 13572–13578] and provided preliminary evidence that this enzyme may correspond to diaphorase 4, an enzymatic activity present in various tissues that catalyzes the reduction of a variety of quinones by both NADH and NADPH [Edwards et al. (1980) Biochem. J. 187, 429–436]. In the present report we characterize the catalytic properties of the protein encoded by the NQO₁ cDNA. The enzyme was synthesized in monkey kidney COS‐1 cells transfected with a pMT2‐based expression plasmid containing the NQO₁ cDNA. Western blot analysis of the transfected cells using an antibody against rat liver cytosolic NQO₁ revealed a 31‐kDa band that was not detected in nontransfected cells. This band corresponded to a polypeptide with the same electrophoretic mobility as the endogenous NQO₁ protein detected in the human hepatoblastoma (Hep‐G2) cells with the same antibody. The immunoreactive protein detected in human Hep‐G2 cells was induced approximately fourfold by exposure of the cultures to dioxin, an increase commensurate with the increase in quinone oxidoreductase activity. These studies suggest that the protein encoded by NQO₁ cDNA is indeed similar, if not identical, to the dioxin‐inducible protein band detected in human Hep‐G2 cells. Further characterization of the product of NQO₁ cDNA, which was present at approximately 20–30‐fold higher levels in transfected COS cells than the endogenous product in uninduced human Hep‐G2 cells indicated that it had very high capacity (> 1000‐fold over background) to catalyze the reduction of 2,6‐dichloroindophenol and menadione. Besides these two commonly used substrates for quinone reductases, the expressed NQO₁ protein also effectively metabolized 2,6‐dimethylbenzoquinone, methylene blue, p‐benzoquinone, 1,4‐naphthoquinone, 2‐methyl‐1, 4‐benzoquinone, with the latter being the most potent electron acceptor at 50 μM concentration of the substrate. The reduction of menadione by the NQO₁ enzyme expressed in COS cells was equally effective with either NADH or NADPH as electron donors and was markedly inhibited by low concentrations of dicoumarol. The various properties of the NQO₁ protein described in the present report are in complete agreement with those of the human diaphorase 4 enzyme. We conclude, therefore, that the NQO₁ cDNA codes for human diaphorase 4 activity. The high level of expression of the NQO₁ in COS cells, which have negligible endogenous enzymatic activity, will permit direct analysis of the capacity of this enzyme to activate or inactivate various mutagens.