The effect of oleate, palmitate, and octanoate on glucose formation was studied with lactate or pyruvate as substrate. Octanoate was much more quickly oxidized and utilized for ketone body production than were oleate and palmitate. Among fatty acids studied, only octanoate resulted in a marked increase of the 3-hydroxybutyrate/acetoacetate (3- OHB AcAc ) ratio. Each of the fatty acids studied stimulated glucose synthesis from pyruvate. The enhancement of gluconeogenesis by long-chain fatty acids was abolished after the addition of ammonia. As concluded from the “crossover” plot, the stimulatory effect of fatty acids was due to: (i) a stimulation of pyruvate carboxylation, (ii) a provision of reducing equivalents for glyceraldehyde phosphate dehydrogenase, and (iii) an acceleration of flux through hexose diphosphatase. Moreover, palmitate and oleate resulted in an increased generation of mitochondrial phosphpenolpyruvate, while in the presence of octanoate, the activity of mitochondrial phosphoenolpyruvate carboxykinase was diminished. When lactate was used as the glucose precursor, palmitate and oleate increased glucose production by about 50% but did not affect the contribution of mitochondrial phosphoenolpyruvate carboxykinase to gluconeogenesis. In contrast, in spite of the stimulation of both pyruvate carboxylase and hexose diphosphatase, as judged from the crossover plot, the addition of octanoate resulted in a marked inhibition of both glucose formation and mitochondrial generation of phosphoenolpyruvate. The inhibitory effect of octanoate was reversed by ammonia. Results indicate that fatty acids and ammonia are potent regulatory factors of both the rate of glucose formation and the contribution of mitochondrial phosphoenolpyruvate carboxykinase to gluconeogenesis in hepatocytes of the fasted rabbit.