We determined whether a low-fat diet reduces intramuscular triglyceride (IMTG) concentration, whole body lipolyis, total fat oxidation, and calculated nonplasma fatty acid (FA) oxidation during exercise. Seven endurance-trained cyclists were studied over a 3-wk period during which time they exercised 2 h/day at 70% of maximum O2 uptake VO(2 max) and consumed approximately 4,400 kcal/day. During the 1st wk, their fat intake provided 32% of energy. During the 2nd and 3rd wk, they were randomly assigned to eat 2 or 22% of energy from fat (2%FAT or 22%FAT). Compared with 22%FAT, 2%FAT lowered IMTG concentration and raised muscle glycogen concentration at rest (P < 0.05). Metabolism was studied during 1 h of exercise at 67% VO(2 max) performed in the fasted state. 2%FAT resulted in a 27% reduction (P < 0.05) in total fat oxidation vs. 22%FAT without altering the stable isotopically determined rates of plasma free fatty acid or glucose disappearance. Therefore, 2%FAT reduced calculated nonplasma FA oxidation by 40% in association with a 19% reduction in whole body lipolysis while increasing calculated minimal muscle glycogen oxidation compared with 22%FAT (all P < 0.05). In summary, an extremely low fat (2% of energy) and high-carbohydrate diet lowers whole body lipolysis, total fat oxidation, and nonplasma FA oxidation during exercise in the fasted state in association with a reduced concentration of intramuscular triglyceride.