Carnitine palmitoyltransferases 1 and 2 (CPTs) facilitate the import of long-chain fatty acids into mitochondria. Modulation of the catalytic activity of the CPT system is currently under investigation for the development of novel drugs against diabetes mellitus. We report here the 1.6 A resolution structure of the full-length mitochondrial membrane protein CPT-2. The structure of CPT-2 in complex with the generic CPT inhibitor ST1326 ([R]-N-[tetradecylcarbamoyl]-aminocarnitine), a substrate analog mimicking palmitoylcarnitine and currently in clinical trials for diabetes mellitus treatment, was solved at 2.5 A resolution. These structures of CPT-2 provide insight into the function of residues involved in substrate binding and determination of substrate specificity, thereby facilitating the rational design of antidiabetic drugs. We identify a sequence insertion found in CPT-2 that mediates membrane localization. Mapping of mutations described for CPT-2 deficiency, a hereditary disorder of lipid metabolism, implies effects on substrate recognition and structural integrity of CPT-2.