Carnitine octanoyltransferase (COT) in 500g supernatant fluids from mouse liver has a specific activity at least twice that of carnitine acetyltransferase (CAT) or carnitine palmitoyltransferase (CPT). When mice are fed diets containing the lipid-lowering drugs, clofibrate or nafenopin, the specific activity of COT increases 4- and 11-fold, respectively. Liver homogenates from mice fed a control diet, and diets containing clofibrate, nafenopin, or Wy-14,643 were fractionated by sucrose gradient centrifugation, and the subcellular distribution of carnitine acyltransferases was determined. In the controls, peroxisomes contained about 70% of the total COT. The specific activity of COT in the peroxisomal peak was 12-fold greater than either CAT or CPT, and 20-fold greater than the COT activity in the mitochondrial fraction. Treatment with hypolipidemic drugs increased the specific activity of peroxisomal COT 2- to 3-fold and CAT 6- to 12-fold, while mitochondrial COT increased 5- to 11-fold and CAT 19- to 54-fold. COT was purified to homogeneity from livers of mice treated with Wy-14,643. It had an apparent Mr of 60,000 by Sephadex G-100 and sodium dodecyl sulfate (SDS)-polyacrylamide gel electrophoresis, and a maximum activity for octanoyl-CoA with acetyl-CoA and palmitoyl-CoA having activities of 2 and 10%, respectively, when 100 microM acyl-CoA substrates were used. The Km's for 1-carnitine, octanoyl-CoA, palmitoyl-CoA, and acetyl-CoA were 130, 15, 69, and 155 microM, respectively, in the forward direction; and in the reverse direction were 110, 100, 104, and 783 microM for CoASH, octanoylcarnitine, palmitoylcarnitine, and acetylcarnitine, respectively. With Vmax conditions, acetyl-CoA and palmitoyl-CoA had activities of 8 and 26% of the activity for octanoyl-CoA, and acetylcarnitine and palmitoylcarnitine had activities of 7 and 22%, respectively, of the activity for octanoylcarnitine. It is concluded that COT is a separate enzyme present in large amounts in the matrix of mouse liver peroxisomes, with kinetic properties that greatly favor medium-chain acylcarnitine formation.