(1) Subcutaneous or intra-abdominal injections of 8 mg of HgCl2/100 g body weight markedly depressed hepatic fatty acid synthetase activity of chicks at 1 h post-injection. The depression occurred despite the fact that the chicks continued to eat up until the time they were killed. Under these same conditions, the hepatic activity of acetyl-CoA carboxylase (EC 188.8.131.52) was not affected by HgCl2, while the activity of the mitochondrial system of fatty acid elongation was stimulated. (2) When 2-mercaptoethanol was included in the incubation medium for a highly purified preparation of fatty acid synthetase, 500 muM HgCl2 was required to show definite inhibition of the enzyme. When 2-mercaptoethanol was omitted, 50 muM HgCl2 was inhibitory and 100 muM HgCl2 abolished enzyme activity. (3) 2 mM dithiothreitol completely protected the purified fatty acid synthetase preparation from inhibition by 100 muM HgCl2. When dithiothreitol was added after the addition of enzyme to the mercury-containing medium, protection of the enzyme was not complete. (4) Dialysis of cytosol fractions from chicks injected with HgCl2 against 500 vol. of 0.2 M potassium phosphate buffer (pH 7.0) containing 1 mM EDTA and 10 mM dithiothreitol for 4 h at 4 degrees stimulated the fatty acid synthetase activity of the fractions. Dialysis of cytosol fractions from noninjected chicks under the same conditions was without effect on fatty acid synthetase activity. (5) These data support the hypothesis that the inhibitory effect of HgCl2 administered in vivo on hepatic fatty acid synthetase activity in chicks is mediated through the interaction of mercury with the sulfhydryl groups of the enzyme.