The temporal changes in oleate oxidation, lipogenesis, malonyl-CoA concentration and sensitivity of carnitine palmitoyltransferase I (CPT 1) to malonyl-CoA inhibition were studied in isolated rabbit hepatocytes and mitochondria as a function of time after birth of the animal or time in culture after exposure to glucagon, cyclic AMP or insulin. (1) Oleate oxidation was very low during the first 6 h after birth, whereas lipogenesis rate and malonyl-CoA concentration decreased rapidly during this period to reach levels as low as those found in 24-h-old newborns that show active oleate oxidation. (2) The changes in the activity of CPT I and the IC50 (concn. causing 50% inhibition) for malonyl-CoA paralleled those of oleate oxidation. (3) In cultured fetal hepatocytes, the addition of glucagon or cyclic AMP reproduced the changes that occur spontaneously after birth. A 12 h exposure to glucagon or cyclic AMP was sufficient to inhibit lipogenesis totally and to cause a decrease in malonyl-CoA concentration, but a 24 h exposure was required to induce oleate oxidation. (4) The induction of oleate oxidation by glucagon or cyclic AMP is triggered by the fall in the malonyl-CoA sensitivity of CPT I. (5) In cultured hepatocytes from 24 h-old newborns, the addition of insulin inhibits no more than 30% of the high oleate oxidation, whereas it stimulates lipogenesis and increases malonyl-CoA concentration by 4-fold more than in fetal cells (no oleate oxidation). This poor effect of insulin on oleate oxidation seems to be due to the inability of the hormone to increase the sensitivity of CPT I sufficiently. Altogether, these results suggest that the malonyl-CoA sensitivity of CPT I is the major site of regulation during the induction of fatty acid oxidation in the fetal rabbit liver.