Fatty acid binding protein (FABP) is a protein of 12,000 mol wt found in cytosol of intestinal mucosa and other tissues, which exhibits high affinity for long chain fatty acids. It has been suggested that FABP (which may comprise a group of closely related proteins of 12,000 mol wt) participates in cellular fatty acid transport and metabolism. Although earlier findings were consistent with this concept, the present studies were designed to examine its physiological function more directly. Everted jejunal sacs were incubated in mixed fatty acid-monoglyceride-bile acid micelles, in the presence or absence of equimolar concentrations of either of two compounds which inhibit oleate binding to FABP:flavaspidic acid-N-methyl-glucaminate and alpha-bromopalmitate. Oleate uptake, mucosal morphology, and oxidation of [14C]acetate remained unaffected by these agents, but oleate incorporation into triglyceride was inhibited by 62-64% after 4 min. The inhibition by flavaspidic acid was reversible with higher oleate concentrations. The effect of these compounds on enzymes of triglyceride biosynthesis was examined in intestinal microsomes. Neither flavaspidic acid nor alpha-bromopalmitate inhibited acyl CoA:monoglyceride acyl-transferase. Fatty acid:coenzyme A ligase activity was significantly enhanced in the presence of partially purified FABP, probably reflecting a physical effect on the fatty acid substrate or on the formation of the enzyme-substrate complex. Activity of the enzyme in the presence of 0.1 mM oleate was only modestly inhibited by equimolar flavaspidic acid and alpha-bromopalmitate, and this effect was blunted or prevented by FABP. We conclude that in everted gut sacs, inhibition of triglyceride synthesis by flavaspidic acid and alpha-bromopalmitate could not be explained as an effect on fatty acid uptake or on esterifying enzymes in the endoplasmic reticulum but rather can be interpreted as reflecting inhibition of fatty acid binding to FABP. These findings lend further support to the concept that FABP participates in cellular fatty acid transport and metabolism. It is also possible that FABP, by effecting an intracellular compartmentalization of fatty acids and acyl CoA, may play a broader role in cellular lipid metabolism.