The concentration of carnitine in liver increased 28-fold and urinary carnitine excretion 5-fold in alloxan-diabetic sheep. In contrast there were no similar increases in alloxan-diabetic rats. The creatine content of liver decreased 3-fold and creatine excretion decreased 2-fold in diabetic sheep. In contrast the creatine content of liver increased nearly 4-fold in diabetic rats with no change in creatine excretion. The marked increased in production of carnitine by the liver of the diabetic sheep appears possible because of decreased production and excretion of creatine.