The decrease in plasma lactate during dichloroacetate (DCA) treatment is attributed to stimulation of lactate oxidation. To determine whether DCA also inhibits lactate production, we measured glucose metabolism in muscles of fed and fasted rats incubated with DCA and insulin. DCA increased glucose-6-phosphate, an allosteric modifier of glycogen synthase, approximately 50% and increased muscle glycogen synthesis and glycogen content greater than 25%. Lactate release fell; inhibition of glycolysis accounted for greater than 80% of the decrease. This was associated with a decrease in intracellular AMP, but no change in citrate or ATP. When lactate oxidation was increased by raising extracellular lactate, glycolysis decreased (r = - 0.91), suggesting that lactate oxidation regulates glycolysis. When muscle lactate production was greatly stimulated by thermal injury, DCA increased glycogen synthesis, normalized glycogen content, and inhibited glycolysis, thereby reducing lactate release. The major effect of DCA on lactate metabolism in muscle is to inhibit glycolysis.