Ethanol decreased the activity of carnitine palmitoyltransferase I and the rate of fatty acid oxidation in rat hepatocytes in short-term incubations. These effects were mimicked by acetaldehyde, the product of hepatic ethanol metabolism, and were absent when ethanol oxidation was prevented by 4-methylpyrazole. Ethanol was also able to increase intracellular malonyl-CoA levels. The results suggest that inhibition of fatty acid translocation into mitochondria may play an important role in the ethanol-induced inhibition of hepatic fatty acid oxidation.