Type 1 diabetes mellitus is a devastating disorder affecting both glucose and lipid metabolism. Using the nonobese diabetic (NOD) mouse model, we found that diabetic mice had a liver-specific increase in steady state mRNA levels for enzymes involved in oxidation of fatty acids. Increased mRNA abundance was observed in very long-chain acyl-CoA dehydrogenase, long-chain acyl-CoA dehydrogenase (LCAD), medium-chain acyl-CoA dehydrogenase (MCAD), carnitine palmitoyltransferase I (CPT-1a), and the gluconeogenic enzyme phosphoenolpyruvate carboxykinase, whereas short-chain acyl-CoA dehydrogenase mRNA remained unchanged. In contrast, minimal elevations in LCAD and CPT-1a mRNA were observed in hearts of diabetic mice with no significant differences found for the other enzymes. We developed NOD mice with transgenes containing regulatory elements of human MCAD gene controlling a reporter gene to determine if the increase in MCAD gene expression occurred via the well-characterized nuclear receptor response element (NRRE-1). These results demonstrated that the transgene containing the NRRE-1 and adjacent 5' sequences had elevated liver expression in diabetic mice compared with prediabetic or normal control mice. Surprisingly, the transgene that contains NRRE-1 with adjacent 3' sequences and the transgene with the NRRE-1 deleted showed minimal response to the fulminant diabetic condition.Collectively, these results indicate that in type 1 diabetes there exists an excessive and liver-specific activation of fatty acid oxidation gene expression. Using human MCAD as a prototype gene, we have shown that this increased expression is mediated at the transcriptional level but does not occur via the well-characterized NRRE-1 site responsible for baseline expression in normal mice.