The rat liver carnitine palmitoyltransferase 1 (L-CPT1), an integral outer mitochondrial membrane (OMM) protein, is the key regulatory enzyme of fatty acid oxidation and is inhibited by malonyl-CoA. In vitroimport of L-CPT1 into the OMM requires the presence of mitochondrial receptors and is stimulated by ATP but is membrane potential-independent. Its N-terminal domain (residues 1–150), which contains two transmembrane segments, possesses all of the information for mitochondrial targeting and OMM insertion. Deletion of this domain abrogates protein targeting, whereas its fusion to non-OMM-related proteins results in their mitochondrial targeting and OMM insertion in a manner similar to L-CPT1. Functional analysis of chimeric CPTs expressed in Saccharomyces cerevisiaeshows that this domain also mediates in vivoprotein insertion into the OMM. When the malonyl-CoA-insensitive CPT2 was anchored at the OMM either by a specific OMM signal anchor sequence (pOM29) or by the N-terminal domain of L-CPT1, its activity remains insensitive to malonyl-CoA inhibition. This indicates that malonyl-CoA sensitivity is an intrinsic property of L-CPT1 and that its N-terminal domain cannot confer malonyl-CoA sensitivity to CPT2. Replacement of the N-terminal domain by pOM29 results in a less folded and less active protein, which is also malonyl-CoA-insensitive. Thus, in addition to its role in mitochondrial targeting and OMM insertion, the N-terminal domain ofL-CPT1 is essential to maintain an optimal conformation for both catalytic function and malonyl-CoA sensitivity.