The activity of pyruvate carboxylase in rat liver mitochondria was estimated by measuring the ¹⁴CO₂ incorporation in the presence of pyruvate, adenosine triphosphate, magnesium, and inorganic phosphate. Malate, fumarate, and citrate were shown to be the main radioactive products. When glutamate was added to the system, radioactive aspartate was also formed. Oxalacetate accumulated in only minute amounts; it could not be trapped by enzymatic reactions outside the mitochondria. The amount of radioactive products was decreased by addition of creatine, and nearly abolished by glucose, when these were used as phosphoryl acceptors. About 40% of the incorporated ¹⁴CO₂ in malate and aspartate was found in carbon 1 of these compounds, demonstrating that a high degree of randomization of the label had occurred. Pyruvate carboxylation was inhibited by ADP. The inhibition could be overcome by addition of inorganic phosphate which removed ADP by oxidative phosphorylation. Excess ATP did not relieve the inhibition. Addition of caprylate to the system caused a strong inhibition of pyruvate decarboxylation and promoted the formation of radioactive malate and fumarate, whereas the accumulation of the other radioactive compounds was decreased. The data, together with previous information, indicate that phosphoenolpyruvate is synthesized from pyruvate by a pathway involving pyruvate carboxylation and formation of aspartate and malate inside the mitochondria, diffusion of these compounds into the cytosol, and their conversion to phosphoenolpyruvate via oxalacetate. The regulation of this pathway is discussed and a hypothesis as to how fatty acids could control gluconeogenesis is outlined.