The oxidation of butyrate, hexanoate and octanoate by rat-liver mitochondria suspended in a tris-potassium chloride medium in the presence of malate and serum albumin has been investigated. 2. The oxidation of butyrate to acetoacetate was markedly decreased by the addition of a system competitive for ATP (hexokinase-glucose). 3. Serum albumin or tricarboxylic acid-cycle intermediates prevented the inhibition by hexokinase and in their presence a greater proportion of the oxygen consumption was contributed by the tricarboxylic acid cycle. The results suggest that the energy supply for fatty acid activation is either compartmentalized in a spatial or kinetic sense or there exists a special activating mechanism not involving ATP. 4. Malate and other tricarboxylic acid-cycle intermediates caused substantial reduction (to beta-hydroxybutyrate) of the acetoacetate formed during the oxidation of butyrate, hexanoate and octanoate.