High-fat, energy-dense diets promote weight gain and obesity in humans and other animals, but the mechanisms underlying such diet-induced obesity remain elusive. To determine whether a reduced capacity to oxidize fat is involved in the etiology of diet-induced obesity, we examined different measures of fatty acid oxidation in rats selectively bred for susceptibility (DIO) or resistance (DR) to dietary obesity before and after they were fed a high-fat diet and became obese. DIO rats eating a low-fat diet oxidized less dietary fatty acid in vivo and had lower levels of plasma ketone bodies during fasting compared with DR rats. Lean DIO rats fed a low-fat diet showed reduced liver messenger RNA expression of CD36, which transports fatty acids across cell membranes, and long-chain acyl-coenzyme A dehydrogenase (ACADL), which catalyzes the first step in the mitochondrial β-oxidation of fatty acids. The deficit in CD36 and ACADL messenger RNA expression was also seen in obese DIO rats that had been eating a high-fat diet and, in addition, was accompanied by reduced expression of liver carnitine palmitoyl transferase I, the enzyme that mediates transport of long-chain fatty acids into mitochondria. No differences were found in the expression of liver enzymes involved in fat synthesis; however, in muscle, DIO rats fed the low-fat, but not high-fat, diet showed greater expression of diacylglycerol O-acyltransferase 1 and lipoprotein lipase than did DR rats. Expression of muscle enzymes involved in fatty acid oxidation was similar in the 2 groups. These findings provide a metabolic mechanism for the development of diet-induced obesity and thus suggest potential targets for intervention strategies to treat or prevent it.