This study was undertaken to determine the effects of increasing exercise time until exhaustion on the capacity of liver to synthesize and oxidize fatty acids, as well as the capacity of muscle to oxidize fatty acids. Additionally, the same parameters were examined during various periods of recovery after exhaustion. These studies were prompted by the scarcity of information relating the effects of exercise on the metabolism of fatty acids in liver, and by our findings and those of others where exhaustive exercise was reported to cause a decrease in the capacity of muscle to oxidize fatty acids. The latter led to the hypothesis that the reported decrease in fatty acid oxidation may be a factor in fatigue. Thus the purpose of the present studies was threefold. The first was to determine changes in fatty acid metabolism in liver during exercise and recovery; the second was to test the above hypothesis by following time-course changes of fatty acid oxidation by muscle; and the third was to determine whether or not the effects of exhaustion are reversible. The results obtained showed that fatty acid synthesis in liver decreased with increasing time but returned to normal levels by approximately 12 hr of rest after exhaustion. Oxidation of fatty acids by liver remained unchanged during the first hour of exercise but steadily increased afterwards until it reached a maximum at exhaustion. Oxidation returned to control level after 12 hr of rest and remained so during the subsequent recovery period. Fatty acid oxidation by muscle was maximally depressed after 1 hr of exercise, yet the animals continued to run, thus ruling out the possibility that the decreased oxidation of fatty acids with exhaustion is a factor in fatigue. Finally, recovery studies showed that the biochemical processes that were examined returned to control levels within 12–24 hr after exercise demonstrating that these effects are not permanent.