Liver fatty acid binding protein (L‐FABP) has been proposed to limit the availability of long‐chain fatty acids (LCFA) for oxidation and for peroxisome proliferator‐activated receptor α (PPAR‐α), a fatty acid binding transcription factor that determines the capacity of hepatic fatty acid oxidation. Here, we used L‐FABP null mice to test this hypothesis. Under fasting conditions, this mutation reduced β‐hydroxybutyrate (BHB) plasma levels as well as BHB release and palmitic acid oxidation by isolated hepatocytes. However, the capacity for ketogenesis was not reduced: BHB plasma levels were restored by octanoate injection; BHB production and palmitic acid oxidation were normal in liver homogenates; and hepatic expression of key PPAR‐α target (MCAD, mitochondrial HMG CoA synthase, ACO, CYP4A3) and other (CPT1, LCAD) genes of mitochondrial and extramitochondrial LCFA oxidation and ketogenesis remained at wild‐type levels. During standard diet, mitochondrial HMG CoA synthase mRNA was selectively reduced in L‐FABP null liver. These results suggest that under fasting conditions, hepatic L‐FABP contributes to hepatic LCFA oxidation and ketogenesis by a nontranscriptional mechanism, whereas L‐FABP can activate ketogenic gene expression in fed mice. Thus, the mechanisms whereby L‐FABP affects fatty acid oxidation may vary with physiological condition.