Hepatic ketogenesis provides a vital systemic fuel during fasting because ketone bodies are oxidized by most peripheral tissues and, unlike glucose, can be synthesized from fatty acids via mitochondrial beta-oxidation. Since dysfunctional mitochondrial fat oxidation may be a cofactor in insulin-resistant tissue, the objective of this study was to determine whether diet-induced insulin resistance in mice results in impaired in vivo hepatic fat oxidation secondary to defects in ketogenesis. Ketone turnover (micromol/min) in the conscious and unrestrained mouse was responsive to induction and diminution of hepatic fat oxidation, as indicated by an eightfold rise during the fed (0.50+/-0.1)-to-fasted (3.8+/-0.2) transition and a dramatic blunting of fasting ketone turnover in PPARalpha(-/-) mice (1.0+/-0.1). C57BL/6 mice made obese and insulin resistant by high-fat feeding for 8 wk had normal expression of genes that regulate hepatic fat oxidation, whereas 16 wk on the diet induced expression of these genes and stimulated the function of hepatic mitochondrial fat oxidation, as indicated by a 40% induction of fasting ketogenesis and a twofold rise in short-chain acylcarnitines. Together, these findings indicate a progressive adaptation of hepatic ketogenesis during high-fat feeding, resulting in increased hepatic fat oxidation after 16 wk of a high-fat diet. We conclude that mitochondrial fat oxidation is stimulated rather than impaired during the initiation of hepatic insulin resistance in mice.