The objective of the present study was to test the hypothesis that fatty acids are the circulating mediators acting in a pro-inflammatory manner towards activated circulating ovine monocyte/macrophages and neutrophils. Furthermore, whether soya protein hydrolysates (SPH) inhibit the fatty acid-induced increase in the production of pro-inflammatory responses by ovine phagocytes was tested in vitro. All the fatty acids tested (myristic, palmitic, palmitoleic, stearic and oleic) increased (P < 0·01; C18>C16>C14) membrane-bound urokinase plasminogen activator (u-PA) and u-PA free binding sites in cell membranes of activated ovine blood monocytes/macrophages, but only the C18 fatty acids (stearic, oleic) were effective towards blood neutrophils. The C18 fatty acids up-regulated (P < 0·05) the gene expression of u-PA, u-PA receptor, intercellular adhesion molecule 1 and inducible NO synthase (in monocytes) but not that of cyclo-oxygenase-2, integrin α X and plasminogen activator inhibitor types 1 and 2 by ovine phagocytes. SPH blocked completely or partially all C18 fatty acid-induced changes in the expression of various pro-inflammatory genes. In conclusion, fatty acids selectively ‘activate’ ovine phagocytes, suggesting that these cells ‘sense’ metabolic signals derived from adipocytes. Soya protein peptides inhibit all changes in gene expression induced by fatty acids in ovine phagocytes in vitro. This constitutes a novel mechanism of action.