The renal organic anion transport system has been linked to the selective extraction of nonesterified fatty acids (NEFA) from arterial blood. Consequently, p-aminohippurate (PAH) and palmitate may compete for a common intracellular binding site or may be handled by a common enzymatic pathway. The purpose of this study was to identify sites of interaction by correlating alterations in PAH accumulation and palmitate metabolism after selective stimulation of the PAH transport system. Penicillin treatment of immature rabbits increased PAH accumulation by suspensions of proximal tubules prepared nonenzymatically) and altered distribation of incorporated palmitate[14C] within tubule lipid classes. Penicillin increased palmitate[14C] esterified to triglycerides and decreased 14C recovered as NEFA. Administration of iodipamide had no effect on PAH accumulation and did not alter palmitate utilization. Penicillin treatment of mature rabbits did not alter either tubule PAH accumulation or palmitate esterification. These results suggested that palmitate and PAH share a common intracellular binding site and that penicillin enhanced PAH accumulation by removing endogenous inhibitors (NEFA).