Peroxisomes of Saccharomyces cerevisiae are the exclusive site of fatty acid beta-oxidation. We have found that fatty acids reach the peroxisomal matrix via two independent pathways. The subcellular site of fatty acid activation varies with chain length of the substrate and dictates the pathway of substrate entry into peroxisomes. Medium-chain fatty acids are activated inside peroxisomes hby the acyl-CoA synthetase Faa2p. On the other hand, long-chain fatty acids are imported from the cytosolic pool of activated long-chain fatty acids via Pat1p and Pat2p, peroxisomal membrane proteins belonging to the ATP binding cassette transporter superfamily. Pat1p and Pat2p are the first examples of membrane proteins involved in metabolite transport across the peroxisomal membrane.