Hepatic mitochondrial functions related to fatty acid metabolism, including the respiratory control ratio, fatty acid oxidative capacity and carnitine palmitoyltransferase I activity, were studied in vitro with mitochondria isolated from rats treated with thioacetamide for up to 12 wk. The levels of ketone bodies, carnitine, carnitine esters and malonyl+oenzyme A were also determined in liver extracts. Polarography of mitochondrial respiration from succinate or glutamate plus malate showed a lower respiratory control ratio in thioacetamide-treated rats, whereas uncoupled oxygen consumption was not altered. This suggests that the mitochondrial respiratory chain capacity remained intact in the thioacetamide-treated rats. The oxygen consumption associated with palmitoylcoenzyme A and palmitoyl-L-carnitine oxidation by isolated liver mitochondria was increased by thioacetamide treatment on both a per-mitochondrial protein and a per-total liver basis. The carnitine palmitoyltransferase I activity; the tissue levels of ketone bodies, carnitine and carnitine esters; and the phydroxybutyrate/acetoacetate ratio were all higher in the livers of thioacetamide-treated animals than in control livers, whereas the hepatic malonyl-coenzyme A level was decreased by thioacetamide. These results indicate the increased diversion of cytosolic longchain acyl-coenzyme As into the mitochondria for f3-oxidation rather than their esterification and use in lipogenesis. These intrahepatic metabolic changes induced by chronic thioacetamide administration may reflect the whole-body catabolic state and can be seen as adaptive for maintaining energy homeostasis under conditions of impaired glucose tolerance. (HEPATOLOGY 1992;15:1099-1106.) Chronic liver dysfunction due to cirrhosis is relatively common and is accompanied by several metabolic alterations that affect the maintenance of energy homeostasis. These changes include increases in plasma free fatty acids (FFAs) (1-lo), ketone bodies (2, 5, 6 , 8) and glycerol (1,8,10); decreases in the plasma triacylglycerol (TG) level (2, 6, 7, 11) and the insulin/glucagon molar ratio (2,5,6,12); impairment of glucose tolerance