1. A permeabilized isolated rat liver cell preparation was developed to achieve selective permeabilization of the cell membrane to metabolites and to allow the assay of mitochondrial overt carnitine palmitoyltransferase (CPT I) activity in situ. By performing the digitonin-induced permeabilization in the presence of fluoride and bivalent-metal-cation sequestrants, it was possible to demonstrate that the activity of other enzymes, which are regulated by reversible phosphorylation, was preserved during the procedure and subsequent washing of cells before assay. 2. CPT activity at a sub-optimal palmitoyl-CoA concentration was almost totally (approximately 90%) inhibited by malonyl-CoA, indicating that mitochondrial CPT I was largely measured in this preparation. 3. The palmitoyl-CoA-saturation and malonyl-CoA-inhibition curves for CPT activity in permeabilized cells were very similar to those obtained previously for the enzyme in isolated liver mitochondria. Moreover, starvation and diabetes had the same effects on enzyme activity, affinity for palmitoyl-CoA and malonyl-CoA sensitivity of CPT I in isolated cells as found in isolated mitochondria. These physiologically induced changes persisted through the cell preparation and incubation period. 4. Neither incubation of cells with glucagon or insulin nor incubation with pyruvate and lactate before permeabilization resulted in alterations of these parameters of CPT I in isolated cells. 5. The results are discussed in relation to the temporal relationships of changes in the activity and properties of CPT I in vivo in relation to the effects of insulin and glucagon on fatty acid metabolism in vivo.