Fatty acids produced a stimulation of gluconeogenesis and either inhibition or no effect on ureagenesis in livers perfused with gluconeogenic substrates and having NH4Cl plus ornithine as the nitrogen source. This finding indicates that stimulation of flux through pyruvate carboxylase is not sufficient to enhance urea production from ammonia. The metabolic action of fatty acids showed the following characteristics: (1) it was concentration-dependent, showing saturation-type kinetics similar to those described for fatty acid oxidation; (2) the stimulatory action on gluconeogenesis was constant and independent of NH4Cl concentration, whereas the inhibition of ureagenesis was variable and dependent on NH4Cl concentration and the degree of reduction of the gluconeogenic substrate; and (3) fatty acids produced apparent reciprocal changes in the state of reduction of the cytosolic and mitochondrial NAD systems. Fatty acid oxidation exerted its effect mainly, if not exclusively, by preventing the gluconeogenic substrate-induced stimulation of ureagenesis. Fatty acids also inhibited ureagenesis without stimulating gluconeogenesis (lactate < 1 mmol/L), ruling out a limiting energy availability as the cause of the inhibition. One or both of the following two mechanisms seem to account for the fatty acid-induced inhibition of ureagenesis from NH4Cl. First, a decreased uptake of ornithine, and second, decreased flux through pyruvate dehydrogenase and probably other NAD(P)-linked mitochondrial dehydrogenases. The correlation found between the ability of fatty acids to inhibit ureagenesis and the state of activation of pyruvate dehydrogenase supports the latter point.