The uptake and oxidation of free fatty acids by the liver and by the non-hepatic splanchnic area were investigated in anesthetized; control and diabetic dogs. The animals received a constant infusion of albumin-bound 1-14C-palmitate. The liver of the control dogs removed 67 μmoles of FFA/min, the NHSA took up 32 μmoles/-min. Hepatic extraction of the labeled FFA was 35%; splanchnic extraction 22% of the arterial level. About 13% of the removed FFA was oxidized both by the liver and by the NHSA. The liver released 13% of the removed labeled carbon as TG, and 7% of the fatty acid carbon as βOHB. Hepatic FFA uptake accounted for 37%, NHSA uptake for 22% of the total body FFA flux. NHSA removed glucose in the control, but not in the diabetic animals. Uptake and oxidation of FFA, both by the liver and by the NHSA, were considerably elevated in the diabetic dogs. However; the ratios of FFA uptake to total FFA flux were not significantly different. The fractional release of TG from the liver was not significantly changed. A direct correlation was shown between the arterial FFA level and either the uptake or oxidation of FFA by the NHSA. Since neither the pancreas nor the spleen exhibited a more active FFA metabolism than did the intestine, it seemed that most of the metabolic changes noted in the NHSA were due to the gastrointestinal tract.