In the liver, malonyl-CoA is central to many cellular processes, including both fatty acid biosynthesis and oxidation. Malonyl-CoA decarboxylase (MCD) is involved in the control of cellular malonyl-CoA levels, and functions to decarboxylate malonyl-CoA to acetyl-CoA. MCD may play an essential role in regulating energy utilization in the liver by regulating malonyl-CoA levels in response to various nutritional or pathological states. The purpose of the present study was to investigate the role of liver MCD in the regulation of fatty acid oxidation in situations where lipid metabolism is altered. A single MCD enzyme of molecular mass 50.7 kDa was purified from rat liver using a sequential column chromatography procedure and the cDNA was subsequently cloned and sequenced. The liver MCD cDNA was identical to rat pancreatic beta-cell MCD cDNA, and contained two potential translational start sites, producing proteins of 50.7 kDa and 54.7 kDa. Western blot analysis using polyclonal antibodies generated against rat liver MCD showed that the 50.7 kDa isoform of MCD is most abundant in heart and liver, and of relatively low abundance in skeletal muscle (despite elevated MCD transcript levels in skeletal muscle). Tissue distribution experiments demonstrated that the pancreas is the only rat tissue so far identified that contains both the 50.7 kDa and 54. 7 kDa isoforms of MCD. In addition, transfection of the full-length rat liver MCD cDNA into COS cells produced two isoforms of MCD. This indicated either that both initiating methionines are functionally active, generating two proteins, or that the 54.7 kDa isoform is the only MCD protein translated and removal of the putative mitochondrial targeting pre-sequence generates a protein of approx. 50.7 kDa in size. To address this, we transiently transfected a mutated MCD expression plasmid (second ATG to GCG) into COS-7 cells and performed Western blot analysis using our anti-MCD antibody. Western blot analysis revealed that two isoforms of MCD were still present, demonstrating that the second ATG may not be responsible for translation of the 50.7 kDa isoform of MCD. These data also suggest that the smaller isoform of MCD may originate from intracellular processing. To ascertain the functional role of the 50. 7 kDa isoform of rat liver MCD, we measured liver MCD activity and expression in rats subjected to conditions which are known to alter fatty acid metabolism. The activity of MCD was significantly elevated under conditions in which hepatic fatty acid oxidation is known to increase, such as streptozotocin-induced diabetes or following a 48 h fast. A 2-fold increase in expression was observed in the streptozotocin-diabetic rats compared with control rats. In addition, MCD activity was shown to be enhanced by alkaline phosphatase treatment, suggesting phosphorylation-related control of the enzyme. Taken together, our data demonstrate that rat liver expresses a 50.7 kDa form of MCD which does not originate from the second methionine of the cDNA sequence. This MCD is regulated by at least two mechanisms (only one of which is phosphorylation), and its activity and expression are increased under conditions where fatty acid oxidation increases.