In an effort to better characterize uncoupling protein-3 (UCP3) function in skeletal muscle, we assessed basal UCP3 protein content in rat intermyofibrillar (IMF) and subsarcolemmal (SS) mitochondrial subfractions in conjunction with measurements of state 4 respiration. UCP3 content was 1.3-fold ( P < 0.05) greater in IMF compared with SS mitochondria. State 4 respiration was 2.6-fold greater ( P < 0.05) in the IMF subfraction than in SS mitochondria. GDP attenuated state 4 respiration by ∼40% ( P < 0.05) in both subfractions. The UCP3 activator oleic acid (OA) significantly increased state 4 respiration in IMF mitochondria only. We used chronic electrical stimulation (3 h/day for 7 days) to investigate the relationship between changes in UCP3 protein expression and alterations in state 4 respiration during contractile activity-induced mitochondrial biogenesis. UCP3 content was increased by 1.9- and 2.3-fold in IMF and SS mitochondria, respectively, which exceeded the concurrent 40% ( P < 0.05) increase in cytochrome- c oxidase activity. Chronic contractile activity increased state 4 respiration by 1.4-fold ( P < 0.05) in IMF mitochondria, but no effect was observed in the SS subfraction. The uncoupling function of UCP3 accounted for 50–57% of the OA-induced increase in state 4 respiration in IMF mitochondria, which was independent of the induced twofold difference in UCP3 content due to chronic contractile activity. Thus modifications in UCP3 function are more important than changes in UCP3 expression in modifying state 4 respiration. This effect is evident in IMF but not SS mitochondria. We conclude that UCP3 at physiological concentrations accounts for a significant portion of state 4 respiration in both IMF and SS mitochondria, with the contribution being greater in the IMF subfraction. In addition, the contradiction between human and rat training studies with respect to UCP3 protein expression may partly be explained by the greater than twofold difference in mitochondrial UCP3 content between rat and human skeletal muscle.