1. Hepatocytes isolated from starved rats and incubated without other substrates oxidized ethanol at a rate of 0.8-0.9mumol/min per g wet wt. of cells. Addition of 10mm-lactate increased this rate 2-fold. 2. Quinolinate (5mm) or tryptophan (1mm) decreased the rate of gluconeogenesis with 10mm-lactate and 8mm-ethanol from 0.39 to 0.04-0.08mumol/min per g wet wt. of cells, but rates of ethanol oxidation were not decreased. From these results it appears that acceleration of ethanol oxidation by lactate is not dependent upon the stimulation of gluconeogenesis and the consequent increased demand for ATP. 3. As another test of the relationship between ethanol oxidation and gluconeogenesis, the initial lactate concentration was varied from 0.5mm to 10mm and pyruvate was added to give an initial [lactate]/[pyruvate] ratio of 10. This substrate combination gave a large stimulation of ethanol oxidation (from 0.8 to 2.6mumol/min per g wet wt. of cells) at low lactate concentrations (0.5-2.0mm), but rates remained nearly constant (2.6-3.0mumol/min per g wet wt. of cells) at higher lactate concentrations (2.0-10mm). 4. In contrast, owing to the presence of ethanol, the rate of glucose synthesis was only slightly increased (from 0.08 to 0.12mumol/min per g wet wt. of cells) between 0.5mm- and 2.0mm-lactate and continued to increase (from 0.12 to 0.65mumol/min per g wet wt. of cells) with lactate concentrations between 2 and 10mm. 5. In the presence of ethanol, O(2) uptake increased with increasing substrate concentration over the entire range. 6. Changes in concentrations of glutamate and 2-oxoglutarate closely paralleled changes in the rate of ethanol oxidation. 7. In isolated hepatocytes, rates of ethanol oxidation are lower than those in vivo apparently because of depletion of malate-aspartate shuttle intermediates during cell preparation. Rates are returned to those observed in vivo by substrates that increase the intracellular concentration of shuttle metabolites.