The cloning of the uncoupling protein (UCP)1 homologs UCP2 and UCP3 has raised considerable interest in the mechanism. The expression of UCP3 mainly in skeletal muscle mitochondria and the potency of the skeletal muscle as a thermogenic organ made UCP3 an attractive target for studies toward manipulation of energy expenditure to fight disorders such as obesity and type 2 diabetes. Overexpressing UCP3 in mice resulted in lean, hyperphagic mice. However, the lack of an apparent phenotype in mice lacking UCP3 triggered the search for alternative functions of UCP3. The observation that fatty acid levels significantly affect UCP3 expression has given UCP3 a position in fatty acid handling and/or oxidation. Emerging data indicate that the primary physiological role of UCP3 may be the mitochondrial handling of fatty acids rather than the regulation of energy expenditure through thermogenesis. It has been proposed that UCP3 functions to export fatty acid anions away from the mitochondrial matrix. In doing so, fatty acids are exchanged with protons, explaining the uncoupling activity of UCP3. The exported fatty acid anions may originate from hydrolysis of fatty acid esters by a mitochondrial thioesterase, or they may have entered the mitochondria as nonesterified fatty acids by incorporating into and flip-flopping across the mitochondrial inner membrane. Regardless of the origin of the fatty acid anions, this putative function of UCP3 might be of great importance in protecting mitochondria against fatty acid accumulation and may help to maintain muscular fat oxidative capacity.