The presence of two fractions with affinity for 1-14C palmitic acid was demonstrated in the 105,000 x g supernatant of rat liver homogenate by Sephadex G-75 gel filtration. The lowest molecular weight fraction was identified as fatty acid binding protein as judged by its relative elution volume in Sephadex G-75, its binding characteristics to sulfobromophthalein and palmitic acid binding inhibition by flavaspidic acid. Discontinuous sucrose gradient was used to study palmitic acid exchange from these cytosolic fractions to microsomes and mitochondria. Both fractions from rat liver were more effective than albumin in the exchange of palmitic acid to particulate material. Palmitic acid was exchanged from fatty acid binding protein to liposomes. This and perhaps other cytosolic protein/s participate in cellular fatty acid transport.