The effects of intraportal infusion of 0.18–7.20 mmole/h of sodium caproate on gluconeogenesis were studied in isolated perfused livers of fed male rats. Even 0.18 mmole/h of sodium caproate enhanced the incorporation of carbon from the C‐2 and the C‐1 position of the pyruvate‐lactate pool into glucose and glycogen, increased the specific activity of glucose and glycogen, and stimulated the net uptake of lactate and pyruvate as well as the net production of glucose. Net changes in liver glycogen concentration were the same with and without the infusion of caproate. With 0.72 mmole/h of sodium caproate, the ratio of carbon incorporated into glucose to carbon incorporated into CO2 had increased about 8 times for carbon from the C‐2 position and about 4 times for carbon from the C‐1 position of the lactate‐pyruvate pool. An increase in the lactate/pyruvate and the β‐hydroxybutyrate/acetoacetate ratio in the liver and in the perfusion medium occurred only with 0.72mmole/h or more of sodium caproate, whereas the CoASH/CoASAc ratio had already been decreased significantly with 0.18 mmole/h. A similar decrease in the CoASH/CoASAc ratio was observed in vivo in livers of fat‐fed rats. Fat‐feeding led to a 300% increase in the steady‐state concentration of CoASH plus CoASAc in vivo, whereas the steady‐state concentration of CoASH plus CoASAc in perfused livers did not change either with or without caproate. In contrast to this, the total concentration of ATP plus ADP was decreased by 40–50% after 30 min of perfusion with and without caproate. The ATP/ADP ratio was not changed by the intraportal infusion of caproate. From this it has been concluded, that: The primary mechanism by which fatty acids enhance gluconeogenesis is a stimulation of the pyruvate carboxylase reaction and an inhibition of pyruvate oxidation. This is accomplished by an increase in the steady‐state concentration of CoASAc and a decrease in the CoASH/CoASAc ratio, rather than a stimulation of the triosephosphate dehydrogenase reaction by a decreased cytoplasmic NAD+/NADH ratio. The chance that oxaloacetate formed by carboxylation of pyruvate will be converted to phosphoenolpyruvate is higher in liver than in kidney. Changes in the ATP/ADP ratio are not directly related to the regulation of gluconeogenesis by fatty acid oxidation. Copyright © 1968, Wiley Blackwell. All rights reserved