The rat liver carnitine palmitoyltransferase 1 (L-CPT1), an integral outer mitochondrial membrane (OMM) protein, is the key regulatory enzyme of fatty acid oxidation and is inhibited by malonyl-CoA. In vitro import of L-CPT1 into the OMM requires the presence of mitochondrial receptors and is stimulated by ATP but is membrane potential-independent. Its N-terminal domain (residues 1-150), which contains two transmembrane segments, possesses all of the information for mitochondrial targeting and OMM insertion. Deletion of this domain abrogates protein targeting, whereas its fusion to non-OMM-related proteins results in their mitochondrial targeting and OMM insertion in a manner similar to L-CPT1. Functional analysis of chimeric CPTs expressed in Saccharomyces cerevisiae shows that this domain also mediates in vivo protein insertion into the OMM. When the malonyl-CoA-insensitive CPT2 was anchored at the OMM either by a specific OMM signal anchor sequence (pOM29) or by the N-terminal domain of L-CPT1, its activity remains insensitive to malonyl-CoA inhibition. This indicates that malonyl-CoA sensitivity is an intrinsic property of L-CPT1 and that its N-terminal domain cannot confer malonyl-CoA sensitivity to CPT2. Replacement of the N-terminal domain by pOM29 results in a less folded and less active protein, which is also malonyl-CoA-insensitive. Thus, in addition to its role in mitochondrial targeting and OMM insertion, the N-terminal domain of L-CPT1 is essential to maintain an optimal conformation for both catalytic function and malonyl-CoA sensitivity.