Fatty acids are metabolized in the liver by β-oxidation in mitochondria and peroxisomes and by ω-oxidation in microsomes. Peroxisomal β-oxidation is responsible for the metabolism of very long chain fatty acids and mitochondrial β-oxidation is responsible for the oxidation of short, medium and long chain fatty acids. Very long chain fatty acids are also metabolized by the cytochrome P450 CYP4A ω-oxidation system to dicarboxylic acids. Both peroxisomal ω-oxidation and microsomal β- oxidation lead to the generation of H2O2. The genes encoding peroxisomal, microsomal and some mitochondrial fatty acid metabolizing enzymes in the liver are transcriptionally regulated by peroxisome proliferator-activated receptor α (PPARα). Sustained activation of PPARα by peroxisome proliferators has been shown to induce hepatocellular carcinomas in rats and mice. The peroxisome proliferator-induced carcinogenic effect has been attributed to transcriptional activation of PPARα regulated genes and the resulting excessive generation of H2O2. Evidence from mice lacking fatty acyl-CoA oxidase (AOX), PPARα and PPARα / AOX has confirmed the role of PPARα in the development of hepatocellular carcinomas. In addition, mice lacking AOX developed steatohepatitis and provided clues regarding the molecular mechanism responsible for steatosis and steatohepatitis and the role of unmetabolized AOX substrates in the activation of PPARα.