Our understanding of fatty acid biosynthesis in Escherichia coli has increased greatly in recent years. Since the discovery that the intermediates of fatty acid biosynthesis are bound to the heat-stable protein cofactor termed acyl carrier protein, the fatty acid synthesis pathway of E. coli has been studied in some detail. Interestingly, many advances in the field have aided in the discovery of analogous systems in other organisms. In fact, E. coli has provided a paradigm of predictive value for the synthesis of fatty acids in bacteria and plants and the synthesis of bacterial polyketide antibiotics. In this review, we concentrate on four major areas of research. First, the reactions in fatty acid biosynthesis and the proteins catalyzing these reactions are discussed in detail. The genes encoding many of these proteins have been cloned, and characterization of these genes has led to a better understanding of the pathway. Second, the function and role of the two essential cofactors in fatty acid synthesis, coenzyme A and acyl carrier protein, are addressed. Finally, the steps governing the spectrum of products produced in synthesis and alternative destinations, other than membrane phospholipids, for fatty acids in E. coli are described. Throughout the review, the contribution of each portion of the pathway to the global regulation of synthesis is examined. In no other organism is the bulk of knowledge regarding fatty acid metabolism so great; however, questions still remain to be answered. Pursuing such questions should reveal additional regulatory mechanisms of fatty acid synthesis and, hopefully, the role of fatty acid synthesis and other cellular processes in the global control of cellular growth.