5-Aminoimidazole-4-carboxamide 1-β-d-ribofuranoside (AICAR) is taken up by perfused skeletal muscle and phosphorylated to form 5-aminoimidazole-4-carboxamide-1-β-d-ribofuraosyl-5′-monophosphate (analog of 5′-AMP) with consequent activation of AMP-activated protein kinase, phosphorylation of acetyl-CoA carboxylase, decrease in malonyl-CoA, and increase in fatty acid oxidation. This study was designed to determine the effect of increasing levels of palmitate on the rate of fatty acid oxidation. Malonyl-CoA concentration was manipulated with AICAR at different palmitate concentrations. Rat hindlimbs were perfused with Krebs-Henseleit bicarbonate containing 4% bovine serum albumin, washed bovine red cells, 200 μU/ml insulin, 10 mM glucose, and different concentrations of palmitate (0.1–1.0 mM) without or with AICAR (2.0 mM). Perfusion with medium containing AICAR was found to activate AMP-activated protein kinase in skeletal muscle, inactivate acetyl-CoA carboxylase, and decrease malonyl-CoA at all concentrations of palmitate. The rate of palmitate oxidation increased as a function of palmitate concentration in both the presence and absence of AICAR but was always higher in the presence of AICAR. These results provide additional evidence that malonyl-CoA is an important regulator of the rate of fatty acid oxidation at palmitate concentrations in the physiological range.