Injection of hydrazine (0.7 mmole/kg) in the male fasting rats caused an increase in phosphatidate phosphohydrolase (PAP) activity in the soluble fraction of the liver. The increased PAP activity was parallel with a rise in hepatic triacylglycerol (TG) (3.5-fold) and in the catecholamine concentration (3.4-fold) in adrenal glands. Hydrazine also increased serum glucose. The hydrazine-induced increase in PAP activity and TG accumulation was completely prevented by adrenalectomy. The data suggest that increased PAP activity is at least partly responsible for hydrazine-induced fatty liver and that adrenal hormones may take part in the mechanism by which hydrazine exerts its effects on the liver.