A role for cytosolic malonyl-CoA decarboxylase (MCD) as a regulator of fatty acid oxidation has been postulated. However, there is no direct evidence that MCD is present in the cytosol. To address this issue, we performed cell fractionation and electron microscopic colloidal gold studies of rat liver to determine the location and activity of MCD. By both methods, substantial amounts of MCD protein and activity were found in the cytosol, mitochondria and peroxisomes, the latter with the highest specific activity. MCD species with different electrophoretic mobility were observed in the three fractions. The data demonstrate that active MCD is present in the cytosol, mitochondria and peroxisomes of rat liver, consistent with the view that MCD participates in the regulation of cytosolic malonyl-CoA levels and of hepatic fatty acid oxidation.