The administration of octanoate to rats in vivo increased the state of reduction of the hepatic NAD system and decreased the phosphorylation potential. This effect was accompanied by a 20% inhibition of protein synthesis. 2. The acute administration of ethanol produced similar reduction of the hepatic NAD system; however, in contrast to octanoate no effect on the phosphorylation potential was detected and rates of protein synthesis were unaffected. 3. It is concluded that a rise in the state of reduction of the NAD system is not effective in decreasing hepatic protein synthesis in vivo unless it is accompanied by a decrease in the phosphorylation potential.