The fatty acid synthetase of animal tissue consists of two subunits, each containing seven catalytic centers and an acyl carrier site. Proteolytic cleavage patterns indicate that the subunit is arranged into three major domains, I, II, and III. Domain I contains the NH2-terminal end of the polypeptide and the catalytic sites of beta-ketoacyl synthetase (condensing enzyme) and the acetyl-and malonyl-transacylases. This domain, therefore, functions as a site for acetyl and malonyl substrate entry into the process of fatty acid synthesis and acts in part as the site of carbon-carbon condensation, resulting in chain elongation. Domain II is the medial domain and contains the beta-ketoacyl and enoyl reductases, probably the dehydratase, and the 4'-phosphopantetheine prosthetic group of the acyl carrier protein site. Domain II, therefore, is designated as the reduction domain where the keto carbon is reduced to methylene carbon by sequential processes of reduction, dehydration, and reduction again. Throughout these processes, the acyl group is attached to the pantetheine-SH of the acyl carrier protein. The latter site is distal to the cysteine-SH of the beta-ketoacyl synthetase, constitutes the 15000-dalton polypeptide at the COOH-terminal end of Domain II, and connects to Domain III. When the growing chain reaches C16 carbon length, the fatty acyl group is released by the thioesterase activity, which is contained in Domain III. A functional model is proposed based on the aforementioned results and the recent evidence that the synthetase subunits are arranged in a head-to-tail fashion, such that the pantetheine-SH of the acyl carrier protein of one subunit and the cysteine-SH of the beta-ketoacyl synthetase of the second subunit are juxtaposed. In this model, a palmitate synthesizing site contains Domain I of one subunit and Domains II and III of the second subunit. Therefore, even though each subunit contains all of the partial activities of the reaction sequence, the actual palmitate synthesizing unit consists of one-half of a subunit interacting with the complementary half of the other subunit.