Increased lipogenesis, together with hyperlipidemia and increased fat deposition, contribute to obesity and associated metabolic disorders including nonalcoholic fatty liver disease. Here we show that carboxylesterase 1/esterase-x (Ces1/Es-x) plays a regulatory role in hepatic fat metabolism in the mouse. We demonstrate that Ces1/Es-x knockout mice present with increased hepatic lipogenesis and with oversecretion of apolipoprotein B (apoB)-containing lipoproteins (hepatic very-low density lipoproteins), which leads to hyperlipidemia and increased fat deposition in peripheral tissues. Consequently, Ces1/Es-x knockout mice develop obesity, fatty liver, hyperinsulinemia, and insulin insensitivity on chow diet without change in food intake and present with decreased energy expenditure. Ces1/Es-x deficiency prevents the release of polyunsaturated fatty acids from triacylglycerol stores, leading to an up-regulation of sterol regulatory element binding protein 1c-mediated lipogenesis, which can be reversed with dietary ω-3 fatty acids. Conclusion: These studies support a role for Ces1/Es-x in the partitioning of regulatory fatty acids and concomitant control of hepatic lipid biosynthesis, secretion, and deposition. (HEPATOLOGY 2012;56:2188–2198)