The metabolism of hydroxypyruvate to oxalate was studied in isolated rat hepatocytes. [14C]Oxalate was produced from [2-14C]- and [3-14C]- but not [1-14C]hydroxypyruvate. No oxalate was produced from similarly labeled pyruvate. The mechanism by which hydroxypyruvate is metabolized to oxalate involves decarboxylation at the carbon 1 position as the initial step. This activity was distinct from that which produced CO2 from the carbon 1 position of pyruvate. Hydroxypyruvate decarboxylase activity was found mainly in the mitochondria, with the remainder (25%) in the cytosol. No activity was present in the peroxisomes, the probable site of oxalate production from glycolate and glyoxylate. Hydroxypyruvate, but not pyruvate stimulated [14C]oxalate production from [U-14C]fructose, suggesting that hydroxypyruvate is either an intermediate in the fructose-oxalate pathway, or that it prevents carbon from leaving that pathway. The lack of effect of pyruvate in this regard is evidence against redox being the primary effect of hydroxypyruvate and focuses attention on hydroxypyruvate and its precursors as important sources of carbon for oxalate synthesis from both carbohydrate and protein.