The oxidation of fatty acids by rabbit reticulocytes and their isolated mitochondria has been studied with [1‐14C]octanoate, [U‐14C]palmitate and [U‐14C]oleate.The fatty acids, particularly octanoate, represent good respiratory substrates.They are activated both by carnitine‐dependent and carnitine‐independent systems, the former predominating for palmitate, the latter for octanoate.The oxidation of palmitate presents a nearly hyperbolic substrate‐saturation curve. The limitation lies presumably in the capacity of the activating enzymes for the long‐chain fatty acids on in their translocation through the mitochondrial membrane. With octanoate no indication of saturation was observed. It may contribute as much as 65% of the respiratory substrate. Oxaloacetate exerts a double effect on the oxidation of fatty acids. In low concentrations it activates their oxidation as an acceptor for acetyl‐CoA; in high concentrations it serves itself as a source of acetyl‐CoA and produces a competitive inhibition. It is estimated that fatty acids furnish about 10% of the respiratory substrate of reticulocytes under physiological conditions.