Lactate, which accumulates in neonatal plasma during the first hours after delivery, is used by neonatal tissues as a source of energy and carbon skeleton. In this work, lactate use by rat liver during late gestation (last 3 d) and early neonatal life (6 h postpartum) has been studied. The rate of lactate use by liver was compared with that found with oleate, inasmuch as fatty acids are the main substrates for the liver after the onset of lactation. The main fate of lactate in the liver during the perinatal period was ketone bodies, preferentially over CO2 and lipids. The rate of oxidation of lactate and its incorporation into lipids decreased during late gestation, but the rate of ketogenesis from lactate remained high during this period. After birth, the rate of lactate oxidation sharply increased, but lipogenesis decreased and ketogenesis was maintained. The rates of oleate oxidation and ketogenesis from oleate were two orders of magnitude lower than those from lactate. However, the rate of oleate incorporation into lipids was only 4-fold lower than that observed from lactate under the same circumstances. Our results suggest that lactate is a major substrate for the liver during the perinatal period because it is mainly incorporated into ketone bodies. This may target lactate carbons to different neonatal tissues.