Fatty acids (FA) regulate the expression of genes involved in lipid and energy metabolism. In particular, two transcription factors, sterol regulatory element binding protein-1c (SREBP-1c) and peroxisome proliferator activated receptor alpha (PPARalpha), have emerged as key mediators of gene regulation by FA. SREBP-1c induces a set of lipogenic enzymes in liver. Polyunsaturated fatty acids (PUFA), but not saturated or monounsaturated FA, suppress the induction of lipogenic genes by inhibiting the expression and processing of SREBP-1c. This unique effect of PUFA suggests that SREBP-1c may regulate the synthesis of unsaturated FA for incorporation into glycerolipids and cholesteryl esters. PPARalpha plays an essential role in metabolic adaptation to fasting by inducing the genes for mitochondrial and peroxisomal FA oxidation as well as those for ketogenesis in mitochondria. FA released from adipose tissue during fasting are considered as ligands of PPARalpha. Dietary PUFA, except for 18:2 n-6, are likely to induce FA oxidation enzymes via PPARalpha as a "feed-forward " mechanism. PPARalpha is also required for regulating the synthesis of highly unsaturated FA, indicating pleiotropic functions of PPARalpha in the regulation of lipid metabolic pathways. It is yet to be determined whether FA regulate other transcription factors such as liver-X receptor, hepatocyte nuclear factor 4, and carbohydrate response element binding protein.