The effects of dibutyryl cyclic adenosine 3′,5′-monophosphate (Bu 2cAMP) on metabolism of free fatty acids by perfused livers from normal fed male rats were investigated. In one group of experiments, Bu 2cAMP was added to the medium and infused at a constant rate to maintain concentrations of 0. 0.4, 1.0, 4.0, or 10.0 × 10 −5 M nucleotide in the perfusate plasma, assuming the nucleotide was not metabolized by the liver. Oleic acid was infused as the complex with albumin at the rate of 124.3 μmoles/hr. Uptake of free fatty acid by the liver was identical in all groups. Production of ketone bodies, however, increased, and output of triglyceride decreased with increasing concentration of Bu 2cAMP. The nucleotide also stimulated output of glucose. Maximal effects were observed when the concentration of Bu 2cAMP was approximately 2–3 × 10 −5 M. The output of very low density lipoproteins, as judged by flotation in the zonal ultracentrifuge, was also diminished by the nucleotide. In other experiments, 1- 14C-oleate was infused (120.8 μmoles/hr)along with 2 × 10 −5 M Bu 2cAMP, and the disposition of 14C into CO 2, ketone bodies, and esterified lipids was evaluated. Bu 2cAMP depressed the proportion of 1- 14C-oleate converted to triglyceride and increased the fraction converted to ketone bodies and CO 2. Not only was ketogenesis stimulated, but a larger proportion of the ketone bodies was derived from exogenous fatty acid.