Oocyte and embryo metabolism are closely linked with their subsequent developmental capacity. Lipids are a potent source of cellular energy, yet little is known about lipid metabolism during oocyte maturation and early embryo development. Generation of ATP from lipids occurs within mitochondria via beta-oxidation of fatty acids, with the rate-limiting step catalyzed by carnitine palmitoyl transferase I (CPT1B), a process also requiring carnitine. We sought to investigate the regulation and role of beta-oxidation during oocyte maturation and preimplantation development. Expression of Cpt1b mRNA, assessed by real-time RT-PCR in murine cumulus-oocyte complexes (COCs), increased following hormonal induction of oocyte maturation and ovulation in vivo with human chorionic gonadotropin (5 IU) and in embryos reaching the blastocyst stage. Beta-oxidation, measured by the production of (H2O)-H-3 from [H-3]palmitic acid, was significantly increased over that in immature COCs following induction of maturation in vitro with epidermal growth factor (3 ng/ml) and follicle-stimulating hormone (50 mlU/ml). The importance of lipid metabolism for oocyte developmental competence and early embryo development was demonstrated by assessing the rate of embryo development following inhibition or upregulation of beta-oxidation with etomoxir (an inhibitor of CPT1B) or L-carnitine, respectively. Inhibition of beta-oxidation during oocyte maturation or zygote cleavage impaired subsequent blastocyst development. In contrast, L-carnitine supplementation during oocyte maturation significantly increased beta-oxidation, improved developmental competence, and in the absence of a carbohydrate energy supply, significantly increased 2-cell cleavage. Thus, carnitine is an important cofactor for developing oocytes, and fatty acids are an important energy source for oocyte and embryo development.