The comparative gene identification-58 (CGI-58) gene, mutations of which are linked to Chanarin-Dorfman syndrome, encodes a protein of the alpha/beta hydrolase domain subfamily. We report here a new alternative splicing isoform of the murine CGI-58 gene, termed mCGI-58S. Sequence comparison indicates the lack of second and third exons in this cDNA variant. While the full-length protein displayed perilipin-dependent localization to lipid droplets, mCGI-58S showed a predominant cytoplasmic staining when expressed in cells. mCGI-58S was incapable of activating adipose triglyceride lipase but retained the capacity to acylate lysophosphatidic acid. Overexpression of mCGI-58S failed to promote lipid droplet turnover and loss of intracellular triacylglycerols. These results suggest that this splicing event may be involved in the regulation of lipid homeostasis.