Mitochondrial reactive oxygen species (ROS) cause kidney damage in diabetes. We investigated the source and site of ROS production by kidney cortical tubule mitochondria in streptozotocin-induced type 1 diabetes in rats. In diabetic mitochondria, the increased amounts and activities of selective fatty acid oxidation enzymes is associated with increased oxidative phosphorylation and net ROS production with fatty acid substrates (by 40% and 30%, respectively), whereas pyruvate oxidation is decreased and pyruvate-supported ROS production is unchanged. Oxidation of substrates that donate electrons at specific sites in the electron transport chain (ETC) is unchanged. The increased maximal production of ROS with fatty acid oxidation is not affected by limiting the electron flow from complex I into complex III. The maximal capacity of the ubiquinol oxidation site in complex III in generating ROS does not differ between the control and diabetic mitochondria. In conclusion, the mitochondrial ETC is neither the target nor the site of ROS production in kidney tubule mitochondria in short-term diabetes. Mitochondrial fatty acid oxidation is the source of the increased net ROS production, and the site of electron leakage is located proximal to coenzyme Q at the electron transfer flavoprotein that shuttles electrons from acyl-CoA dehydrogenases to coenzyme Q.