Engine oils formulated using molybdenum dialkyldithiocarbamate, Mo(dtc)2, additives can provide substantial friction reduction under mixed to boundary lubrication conditions. It has been previously shown that the effectiveness of Mo(dtc)2 is significantly affected by the presence of other additives and by additive interaction and depletion processes occurring during use. In this study, ligand exchange reactions in an additive system containing Mo(dtc)2 and zinc dialkyldithiophosphate, Zn(dtp)2, have been investigated during oxidation in hexadecane and various base oils at 160°C. Samples of different composition obtained from these studies were used in investigations of the effects of original additives and ligand exchange products on friction reducing capability at 45 and 105°C. Results obtained show that friction reducing capabilities are affected not only by the additives and ligand exchange products but also that base oil type can have dramatic effects on the ability of Mo(dtc)2 containing additive systems to provide and maintain their friction reducing capabilities during use.