The influence of fatty acids on ileal absorption of water, electrolytes, glucose, and taurocholate was examined in Thirty-Vella fistulas in five mongrel dogs. Fatty acid absorption also was measured. Segments of terminal ileum were perfused at steady state with isotonic electrolyte solutions containing 11.2 mM glucose, 4.5 mM taurocholate, and 0.1-5.0 mM fatty acid. Three C₁₈ fatty acids, oleic acid, 10(9)-hydroxystearic acid, and ricinoleic acid, completely inhibited water absorption at 5 mM. Sodium, chloride, and potassium absorptions were inhibited in parallel with absorption of water. Differences between the potencies of C₁₈ fatty acids were apparent when lesser concentrations were perfused. Dodecanoic and decanoic acids were as effective as C₁₈ fatty acids at 5 mM but octanoic and hexanoic acids were ineffective. The polar group of C₁₈ fatty acids was modified by conjugating oleic and ricinoleic acids with taurine. When these compounds and a substituted C₁₈ fatty acid, p-n-decylbenzenesulfonate, were perfused, water absorption was also inhibited. Short-chain fatty acids (C₃ and C₄) and their hydroxylated derivatives were ineffective at 5 mM. When water absorption was inhibited, absorption of glucose and taurocholate was decreased. We speculate that the phenomenon of inhibition of water and electrolyte absorption by fatty acids may be relevant to steatorrhea and diarrhea in man.