The scope of the present work was to investigate the metabolism and the passage of octanoate from albumin into the phospholipid bilayer of the plasma membrane and from thence into the cell space. The experiments were done in the isolated perfused rat liver with infusions of albumin and octanoate at various concentrations. Once steady-state conditions were attained, trace amounts of [1-14C]-octanoate, [131 I]-albumin and [3H]-water were injected simultaneously and the effluent perfusate was fractionated. The normalized dilution curves were used for model analysis. The model which gives the best fit to the experimental results and which also produces the most consistent parameters is one that presupposes a rapid distribution of octanoate into the cell membrane and a slow transfer from the cell membrane into the cytosol. The concentration dependence of the distribution between the membrane and the extracellular space is parabolic, suggesting that octanoate changes the properties of the cell membrane when present at higher concentrations. The passage from the cell membrane into the cell space is relatively slow and limits metabolic transformation partly or totally, depending on the octanoate concentration in the plasma membrane. The rapid transfer of octanoate from the albumin space into the plasma membrane corroborates previous measurements of the dissociation of the albumin-octanoate complex.