Digestion and absorption of lipids were determined in 3-week-old chicks fed diets containing triglycerides, free fatty acids, or free fatty acids with added glycerol. The 91YCl3 was present as a non-absorbed reference substance. Overall absorption of total fatty acids was highest in triglyceride-fed chicks and lowest in chicks receiving fatty acids. Net secretion of endogenous fatty acids from biliary phospholipids was observed in the duodenum of triglyceride fed chicks, whereas in the other treatments net absorption was observed at this site. Fractionation of the intestinal lipids by thin layer chromatography showed that triglycerides were almost completely hydrolyzed in the duodenum. Monoglycerides were present at high levels in the duodenum of triglyceride fed chicks and at lower levels in chicks receiving free fatty acids and glycerol and at trace levels in free fatty acid-fed chicks. Total micellar fatty acids were lowest in the duodenum of free fatty acid-fed chicks. In vitro incubation of pancreatic homogenate with oleic acid, glycerol, phosphatidyl choline, and taurocholate revealed synthesis of monoglycerides. The poorer fat absorption observed on feeding acidulated soapstock instead of triglycerides is partially explained by less efficient micellarization when free fatty acids are fed.