Fatty acid synthesis by isolated liver cells is dependent upon the availability of lactate and pyruvate. A lag in fatty acid synthesis is explained by time being required for lactate and pyruvate to accumulate to maximum concentrations in the incubation medium. The initial rate of fatty acid synthesis is not linear with cell concentration, being disproportionately greater at higher cell concentrations because optimal lactate and pyruvate concentrations are established in the medium more rapidly. The accumulation of lactate and pyruvate is inhibited markedly by N⁶,O^2′-dibutyryl adenosine 3′,5′-monophosphate. This accounts in part for the inhibition of fatty acid synthesis caused by this cyclic nucleotide. Other sites of action are apparent, however, because exogenous lactate plus pyruvate only partially relieves the inhibition. The profile of metabolic intermediates suggests that N⁶,O^2′-dibutyryl adenosine 3′,5′-monophosphate inhibits the conversion of glycogen to pyruvate and lactate by decreasing the effectiveness of phosphofructokinase and pyruvate kinase.