Streptozotocin-induced diabetes significantly decreased rat liver microsomal long-chain fatty acyl-CoA (LCA-CoA) hydrolase. The decrease was observed using either palmitoyl-CoA (35 per cent, p less than 0.01) or oleoyl-CoA (23 per cent, p less than 0.01) as the substrate for the enzyme. Under the same conditions, diabetes did not significantly alter activity of LCA-CoA synthetase. Daily subcutaneous injections of protamine zinc insulin (10-12 units/day) into the diabetic rats returned their blood glucose to normal but only partially corrected the LCA-CoA hydrolase activity and did not effect LCA-CoA synthetase activity. The decreased LCA-CoA hydrolase and the unchanged LCA-CoA synthetase activities in the diabetic rat liver were interpreted as factors that may contribute to elevation of fatty acyl-CoA levels in the diabetic liver.