Previous work has shown that the coupling of the soluble Escherichia coli pyruvate oxidase to a lipid-depleted membrane terminal electron transport system requires the addition of ubiquinone and a neutral lipid fraction (C. Cunningham and L. P. Hager (1975) J. Biol. Chem. 250, 7139-7146). The active factor present in the neutral lipid fraction has now been isolated and characterized. NMR, uv, and mass spectroscopic analysis identifies palmitic acid as the active component. A comparison of palmitic acid with other fatty acids of varying chain lengths indicates that most fatty acids having chain lengths in the range C12 to C20 have comparable activity to palmitic acid. Exceptions are stearic and arachidic acid which have greatly reduced activity. Fatty acids of C6 to C10 chain length showed about one third the activity of palmitic acid. Fatty acids having chain lengths of 2 to 5 carbon atoms are essentially inactive. The carboxyl function of the fatty acid is required for activity. Derivatives of fatty acids in which the carboxyl group had been modified to an alcohol, aldehyde, or methyl ester function show greatly diminished activity. Both the cis and trans forms of unsaturated long-chain fatty acids are active. The stimulation of the electron transfer reaction by fatty acids occurs at the ubiquinone level of the electron transport chain. Ubiquinone-30 is rapidly reduced by pyruvate oxidase only in the presence of palmitic acid.