Defined formula diets in liquid form (enteral formula diets) are being used with increasing frequency to meet the total or partial nutritional needs of adult patients in hospital, nursing home, or clinical situations. These patients must have at least partially functional gastrointestinal tracts; however, many of these patients do have some problems associated with digestive enzyme production, secretion, or activity. It would appear that for these patients, the use of free amino acids in enteral formula diets rather than intact proteins or protein isolates would be better utilized. However, considerable evidence indicates that amino acids may be absorbed as small peptides as well as being absorbed as free amino acids. Protein hydrolysates offer the added advantage of making a lower contribution to osmotic concentration of the formula in comparison to free amino acids. Diarrhea and other symptoms of the dumping syndrome are a frequent problem associated with the feeding of enteral formula diets. It has been assumed that osmotic concentration is the most important characteristic of liquid formula diets associated with this problem. However, recent research indicates that reduction in fluid volume, even at the expense of increase in osmotic concentration, results in improved protein utilization and improved gastrointestinal tract function.