The physiological role of mitochondrial uncoupling proteins (UCPs) in heart and skeletal muscle is unknown, as is whether mitochondrial uncoupling of oxidative phosphorylation by fatty acids occurs in vivo. In this study, we found that UCP2 and UCP3 protein content, determined using Western blotting, was increased by 32 and 48%, respectively, in hyperthyroid rat heart mitochondria. Oligomycin-insensitive respiration rate, a measure of mitochondrial uncoupling, was increased in all mitochondria in the presence of palmitate: 36% in controls and 71 and 100% with 0.8 and 0.9 mM palmitate, respectively, in hyperthyroid rat heart mitochondria. In the isolated working heart, 0.4 mM palmitate significantly lowered cardiac output by 36% and cardiac efficiency by 38% in the hyperthyroid rat heart. Thus increased mitochondrial UCPs in the hyperthyroid rat heart were associated with increased uncoupling and decreased myocardial efficiency in the presence of palmitate. In conclusion, a physiological effect of UCPs on fatty acid oxidation has been found in heart at the mitochondrial and whole organ level.