Balance studies of individual fatty acid (FA) absorption and bile acid (BA) excretion were performed in 23 healthy premature infants fed proprietary formulas, utilizing gas-liquid chromatography. There was a direct correlation between the amount of BA excreted and absorption. This correlation was valid for total fat and for unsaturated dietary FA. Malabsorption of saturated FAs was in proportion to their hydrocarbon chain length and is best explained by their aqueous solubility, independent of BA. Assays of total FA absorption by gas-liquid chromatography and by the method of van de Kamer appear to be interchangeable.