The overt carnitine palmitoyltransferase (palmitoyl-CoA:L-carnitine O-palmitoyltransferase, EC 2.3.1.21) activity of intact mitochondria from rat heart and liver was found to be resistant to the action of proteases such as Nagarse (subtilisin, EC 3.4.21.14). Nagarse under the same conditions, however, greatly decreased the malonyl-CoA inhibition of carnitine palmitoyltransferase activity, the highaffinity binding of malonyl-CoA to mitochondria, and the ability of malonyl-CoA to shift to the right the sigmoid activity curve of carnitine palmitoyltransferase observed with variations in palniitoyl-CoA concentration. No noticeable effect of Nagarse pretreatment was observed on the binding of octanoylCoA to mitochondria. Subfractionation of liver mitochondria using a combination of swelling, shrinking, and density gradient centrifugation yielded a membrane fraction in which the specific activities of the outer membrane marker enzymes were enriched ¢16-fold together with a near-parallel enrichment of malonyl-CoA-inhibitable carnitine palmitoyltransferase activity. The percent recovery of this carnitine palmitoyltransferase in the outer membrane vesicles also matched that of the known outer membrane markers. The carnitine palmitoyltransferase activity of these out-side-out vesicles became susceptible to added Nagarse only on their cosonication. These findings show that whereas the malonyl-CoA binding site relevant to the inhibition of carnitine palmitoyltransferase is situated on the outer side of the outer membrane, the overt carnitine palmitoyltransferase activity resides on the inner side of the outer membrane.