The effect of lipid infusion on glucose homeostasis in the preterm newborn infant was evaluated. Seven infants were given a test dose of 0.25 gm/kg/hour of lipid emulsion. Their response was characterized by :(1) a two fold increase in serum free fatty acid concentrations, (2) a small, transient rise in insulin values, and (3) a sustained increase in serum glucose concentration (mean increment in serum glucose was 24% over baseline). Nine infants received a test dose of 0.5 gm/kg/hr of lipid. Their response was similar to that in the lower infusion group, but of a greater magnitude: an eightfold increase in free fatty acids, sustained increase in serum insulin concentration, and a mean increment in serum glucose values of 65% over baseline. Increased lipid availability in the low-birth-weight newborn infant plays a significant role in promoting an increase in serum glucose concentrations.