The effect of clofibrate treatment on hepatic ketogenic capacity was studied in rats. Ketogenesis from octanoate and oleate was increased 2- and 4,5-fold, respectively, in hepatocytes from fed, treated rats. In contrast to controls ketogenic rates did not increase upon starvation. While ketogenesis from oleate was higher in fed, treated animals than in fasted controls, endogenous ketogenesis was lower and increased upon starvation. Ketogenesis from octanoate and oleate was stimulated approx. 2-fold in homogenates from treated animals. Labeled pyruvate and succinate oxidation was unaltered. [1-14C]Oleate oxidation was severely inhibited by cyanide, both in homogenates from controls and treated animals. Clofibrate caused a 3-fold increase in hepatic carnitine levels. Catalase and glutamate dehydrogenase activities were also increased by the drug. Cytochrome c oxidase did not change. Despite their increased ketogenic capacity hepatocytes from treated rats esterified as much oleate as controls. The increased oxidation was matched by an increased oleate uptake. Plasma ketones were increased 2-fold in fasted, treated animals. Plasma free fatty acids were unaffected. It is concluded that the enhanced ketogenic capacity induced by clofibrate is the result of an increase in mitochondrial beta-oxidation, an increase in the activity of carnitine palmitoyltransferase and possibly of the observed increases in hepatic carnitine content and fatty acid uptake.