The aim of the present paper was to evaluate the effects of in vivo insulin treatment of streptozotocin (SZ) diabetic rats on the metabolism of the isolated, perfused liver. Perfused livers from SZ-diabetic rats showed a higher ketone body production and a higher mitochondrial carnitine-palmitoyl-transferase (CPT) activity than controls, while triglyceride (TG) output and free-fatty-acid (FFA) uptake were significantly reduced. In vivo insulin treatment normalized both the ketogenic capacity of the liver and CPT activity, while FFA uptake and TG production were still lower than in controls. A significant correlation was found between total ketone body output and CPT activity. We suggest that In vivo insulin treatment of SZ-diabetic rats can modulate the ketogenic capacity of the isolated, perfused liver.