In cells, excess of metabolic fuel is converted into fatty acids in cytosol and oxidized later in mitochondria to generate ATP and acetyl-CoA. In fatty acid synthesis, catalytic formation of malonyl-CoA (precursor for long-chain fatty acyl-CoA, LCFA-CoA) from acetyl-CoA by Acetyl-CoA carboxylase (ACC-1) is the rate limiting step. The translocation of LCFA-CoA from cytosol to mitochondria is catalyzed by two carnitine palmitoyl transferases (CPT-1 & CPT-2) and regulated by ACC-2, the rate limiting step of mitochondrial fatty acid b-oxidation. Activities of ACC-1 and -2 are regulated by their phosphorylation by 5'-AMP-activated protein kinase (AMPK). Diabetes deranges AMPK master-switch and represses the ACC-1 gene-expression and stimulates excessive fatty acid oxidation which in turn interferes with glucose metabolism. ACC-2 (rat 2456aa, human 2483aa, ~280kD, chromosome 12q24.1), also known as ACC-beta, is predominantly present in heart and skeletal muscle and to a lesser extent in liver. An additional ACC-2 isoform (270kD) is present in liver. In contrast to ACC-1, which is cytosolic and catalyzes only fatty acid synthesis, ACC-2 co-localizes with CPT-1 in the 'contact sites' of the mitochondrial membranes and regulates mitochondrial fatty acid oxidation as well by inhibiting CPT-1 by its product malonyl-CoA. ACC-2 contains an unique 114aa long N-terminus peptide, accounting in part, for its regulatory role in fatty acid oxidation. ACC2 deficient mice accumulate 10-30 fold less malonyl-CoA in heart and muscle and show 50% less fat in the adipose tissue.