Elucidation of the regulation of uncoupling protein 1 (UCP1) activity in its native environment, i.e. the inner membrane of brown-fat mitochondria, has been hampered by the presence of UCP1-independent, quantitatively unresolved effects of investigated regulators on the brown-fat mitochondria themselves. Here we have utilized the availability of UCP1-ablated mice to dissect UCP1-dependent and UCP1-independent effects of regulators. Using a complex-I-linked substrate (pyruvate), we found that UCP1 can mediate a 4-fold increase in thermogenesis when stimulated with the classical positive regulator fatty acids (oleate). After demonstrating that the fatty acids act in their free form, we found that UCP1 increased fatty acid sensitivity approximately 30-fold (as compared with the 1.5-fold increase reported earlier based on nominal fatty acid values). By identifying the UCP1-mediated fraction of the response, we could conclude that the interaction between purine nucleotides (GDP) and fatty acids (oleate) unexpectedly displayed simple competitive kinetics. In GDP-inhibited mitochondria, oleate apparently acted as an activator. However, only a model in which UCP1 is inherently active (i.e."activating" fatty acids cannot be included in the model), where GDP functions as an inhibitor with a K(m) of 0.05 mm, and where oleate functions as a competitive antagonist for the GDP effect (with a K(i) of 5 nm) can fit all of the experimental data. We conclude that, when examined in its native environment, UCP1 functions as a proton (equivalent) carrier in the absence of exogenous or endogenous fatty acids.