We studied the effects of various concentrations of oleic acid (0.1-3.3 mM), such as are often found in the serum of patients with nonthyroidal illness, on the dialyzable (free) fraction of T4 (DFT4) in three types of serum samples: pooled normal serum (PNS), pooled pregnancy serum (PPS), and pooled serum of hospitalized patients (PSHP). The samples were extracted with diethyl ether to remove endogenous fatty acids before being tested in the DFT4 assay. Oleic acid caused only a moderate increase in DFT4 in PNS; a significant (greater than 2 SD above control) increase (15%) was found with 2.0 mM oleic acid, and the maximal dose of oleic acid (3.3 mM) caused a 33% increase in DFT4. However, the DFT4-increasing effect of oleic acid was enhanced (increase in DFT4 of 33% caused by 0.9-1.2 mM oleic acid) when the serum tested had low (0.5 times normal) albumin and prealbumin concentrations with either normal (50% PPS) or half-normal TBG (50% PNS). The effect of oleic acid in 100% PSHP was significantly (P less than 0.005) greater than that in 100% PNS, and it was close to that in 50% PNS (increase in DFT4 with 3.3 mM oleic acid, 118% in PSHP vs. 98% in 50% PNS). Normalization of serum albumin in PSHP by adding exogenous albumin markedly reduced the DFT4-increasing effect of oleic acid; the maximal increase in DFT4 of 64% with 3.3 mM oleic acid in albumin-normalized PSHP was equalled with 1.3 mM oleic acid in unmodified PSHP. The data suggest that the serum concentrations of albumin and other T4-binding proteins are important in modulating the DFT4-increasing effect of oleic acid and that oleic acid may contribute to the reduced serum binding of T4 in nonthyroidal illness.