Fatty acids accumulate during myocardial ischemia and are implicated in ischemia-reperfusion injury and mitochondrial dysfunction. Because functional recovery after ischemia-reperfusion ultimately depends on the ability of the mitochondria to recover membrane potential (DeltaPsim), we studied the effects of fatty acids on DeltaPsim regulation, cytochrome c release, and Ca2+ handling in isolated mitochondria under conditions that mimicked aspects of ischemia-reperfusion. Long-chain but not short-chain free fatty acids caused a progressive and reversible (with BSA) increase in inner membrane leakiness (proton leak), which limited mitochondrial ability to support DeltaPsim. In comparison, long-chain activated fatty acids promoted 1). a slower depolarization that was not reversible with BSA, 2). cytochrome c loss that was unrelated to permeability transition pore opening, and 3). inhibition of the adenine nucleotide translocator. Together, these results impaired both mitochondrial ATP production and Ca2+ handling. Diazoxide, a selective opener of mitochondrial ATP-dependent potassium (KATP) channels, partially protected against these effects. These findings indicate that long-chain fatty acid accumulation during ischemia-reperfusion may predispose mitochondria to cytochrome c loss and irreversible injury and identify a novel cardioprotective action of diazoxide.