Fat-specific protein (FSP)27/Cidec is most highly expressed in white and brown adipose tissues and increases in abundance by over 50-fold during adipogenesis. However, its function in adipocytes has remained elusive since its discovery over 15 years ago. Here we demonstrate that FSP27/Cidec localizes to lipid droplets in cultured adipocytes and functions to promote lipid accumulation. Ectopically expressed FSP27-GFP surrounds lipid droplets in 3T3-L1 adipocytes and colocalizes with the known lipid droplet protein perilipin. Immunostaining of endogenous FSP27 in 3T3-L1 adipocytes also confirmed its presence on lipid droplets. FSP27-GFP expression also markedly increases lipid droplet size and enhances accumulation of total neutral lipids in 3T3-L1 preadipocytes as well as other cell types such as COS cells. Conversely, RNA interference-based FSP27/Cidec depletion in mature adipocytes significantly stimulates lipolysis and reduces the size of lipid droplets. These data reveal FSP27/Cidec as a novel adipocyte lipid droplet protein that negatively regulates lipolysis and promotes triglyceride accumulation.