When hepatocytes isolated from fasted rats were incubated in medium containing 5 mmol/L pyruvate, addition of albumin-bound palmitate (0.5 mmol/L) increased fatty acid oxidation and the conversion of pyruvate to glucose. Similar stimulation of gluconeogenesis occurred when palmitate was added to hepatocytes in medium containing 5 mmol/L alanine. Addition of 0.5 mmol/L (+)-octanoylcarnitine, an inhibitor of fatty acid oxidation, prevented the increment in beta-oxidation, but not the increase in glucose formation from pyruvate or alanine, induced by palmitate. These studies and other data to be considered subsequently indicate that palmitate can stimulate hepatic gluconeogenesis from three-carbon precursors under conditions that preclude an increase in the formation of reducing equivalents by beta-oxidation.