Modulatory effects of l-carnitine, acetate, propionate, and 5-tetradecyloxy-2-furoic acid (TOFA; an inhibitor of acetyl-CoA carboxylase) on oxidation and esterification of [1-14C]-palmitate were studied in hepatocytes isolated from phlorizin-treated and control wethers. Our hypotheses were that (1) palmitate oxidation would be greater in hepatocytes from sheep injected with phlorizin; (2) l-carnitine would increase palmitate oxidation more in hepatocytes from sheep injected with phlorizin; and (3) acetate and propionate would decrease oxidation in sheep hepatocytes partly through action of acetyl-CoA carboxylase. Palmitate metabolism did not differ between cells from control and those from phlorizin-treated wethers. Carnitine increased oxidation of palmitate to CO2 and acid-soluble products (ASP; mainly ketone bodies) and decreased esterification of palmitate in isolated hepatocytes from both groups of wethers, but the increase in oxidation to ASP was greater in cells from phlorizin-treated wethers. Propionate increased palmitate oxidation to CO2 in phlorizin-treated wethers. Propionate increased oxidation of palmitate to ASP in control wethers but decreased oxidation to ASP in phlorizin-treated wethers. Propionate increased esterification of palmitate to total esterified products and triglyceride, and the effect was larger in phlorizin-treated wethers. Acetate decreased palmitate esterification to total esterified products in control wethers, but the effect was blunted in phlorizin-treated wethers. Acetate did not affect palmitate oxidation. Addition of TOFA increased production of triglyceride from palmitate in the presence of propionate. The lack of interaction between TOFA and propionate indicates that propionate does not inhibit carnitine palmitoyltransferase I via cytosolic generation of methylmalonyl-CoA by acetyl-CoA carboxylase. In conclusion, although in vivo phlorizin treatment did not affect in vitro metabolism of palmitate by isolated ovine hepatocytes, phlorizin increased the stimulatory effect of carnitine on oxidation of palmitate to ASP and the inhibitory effect of propionate on oxidation of palmitate to ASP. Metabolism of acetate and propionate by acetyl-CoA carboxylase did not affect palmitate oxidation or esterification. Results provide additional insight into control of fatty acid metabolism in hepatocytes.