A cDNA encoding full-length carnitine palmitoyltransferase I (CPT I) from rat liver was expressed in Saccharomyces cerevisiae, a system devoid of endogenous CPT activity. The recombinant enzyme was of the expected size (as deduced from immunoblots), membrane-bound, and detergent-labile. It was also potently inhibited by malonyl-CoA, with an I50 value (concentration causing 50% inhibition) of approximately 5 microM, similar to that of the native enzyme in rat liver mitochondria. A truncated variant of the enzyme that lacked the amino-terminal 82 residues encompassing the first hydrophobic domain retained catalytic function but was much less sensitive to malonyl-CoA (I50 > 80 microM). Deletion of the cDNA segment encoding amino acids 31-148 (which includes both first and second hydrophobic stretches) resulted in no detectable product. The data establish unequivocally that a single polypeptide possesses both catalytic and malonyl-CoA binding domains, as well as the other properties previously attributed by us to native CPT I in mammalian mitochondria, and should thus put to rest the controversy surrounding this issue (Kerner, J., Zaluzec, E., Gage, D., and Bieber, L. L. (1994) J. Biol. Chem. 269, 8209-8219). In addition, the results strengthen the view that one site of interaction of malonyl-CoA with the rat liver enzyme involves the NH2-terminal region of the molecule.