1. In an attempt to define the importance of acetate as a metabolic precursor, the activities of acetyl-CoA synthetase (EC 6.2.1.1) and acetyl-CoA hydrolase (Ec 3.1.2.1) were assayed in tissues from rats and sheep. In addition, the concentrations of acetate in blood and liver were measured, as well as the rates of acetate production by tissue slices and mitochondrial fractions of these tissues. 2. Acetyl-CoA synthetase occurs at high activities in heart and kidney cortex of both species as well as in rat liver and the sheep masseter muscle. The enzyme is mostly in the cytosol fraction of liver, whereas it is associated with the mitochondrial fraction in heart tissue. Both mitochondrial and cytosol activities have a K(m) for acetate of 0.3mm. Acetyl-CoA synthetase activity in liver was not altered by changes in diet, age or alloxan-diabetes. 3. Acetyl-CoA hydrolase is widely distributed in rat and sheep tissues, the highest activity being found in liver. Essentially all of the activity in liver and heart is localized in the mitochondrial fraction. Hepatic acetyl-CoA hydrolase activity is increased by starvation in rats and sheep and during the suckling period in young rats. 4. The concentrations of acetate in blood are decreased by starvation and increased by alloxan-diabetes in both species. The uptake of acetate by the sheep hind limb is proportional to the arterial concentration of acetate, except in alloxan-treated animals, where uptake is impaired. 5. Acetate is produced by liver and heart slices and also by heart mitochondrial fractions that are incubated with either pyruvate or palmitoyl-(-)-carnitine. Liver mitochondrial fractions do not form acetate from either substrate but instead convert acetate into acetoacetate. 6. We propose that acetate in the blood of rats or starved sheep is derived from the hydrolysis of acetyl-CoA. Release of acetate from tissues would occur under conditions when the function of the tricarboxylic acid cycle is restricted, so that the circulating acetate serves to redistribute oxidizable substrate throughout the body. This function is analogous to that served by ketone bodies.