CGI-58/ABHD5 coactivates adipose triglyceride lipase (ATGL). In adipocytes, CGI-58 binds to perilipin 1A on lipid droplets under basal conditions, preventing interaction with ATGL. Upon activation of protein kinase A (PKA), perilipin 1A is phosphorylated and CGI-58 rapidly disperses into the cytoplasm, enabling lipase coactivation. Because the amino acid sequence of murine CGI-58 has a predicted PKA consensus sequence of RKYS(239)S(240), we hypothesized that phosphorylation of CGI-58 is involved in this process. We show that Ser239 of murine CGI-58 is a substrate for PKA using phosphoamino acid analysis, MS, and immuno-blotting approaches to study phosphorylation of recombinant CGI-58 and endogenous CGI-58 of adipose tissue. Phosphorylation of CGI-58 neither increased nor impaired coactivation of ATGL in vitro. Moreover, Ser239 was not required for CGI-58 function to increase triacylglycerol turnover in human neutral lipid storage disorder fibroblasts that lack endogenous CGI-58. Both CGI-58 and S239A/S240A-mutated CGI-58 localized to perilipin 1A-coated lipid droplets in cells. When PKA was activated, WT CGI-58 dispersed into the cytoplasm, whereas substantial S239A/S240A-mutated CGI-58 remained on lipid droplets. Perilipin phosphorylation also contributed to CGI-58 dispersion. PKA-mediated phosphorylation of CGI-58 is required for dispersion of CGI-58 from perilipin 1A-coated lipid droplets, thereby increasing CGI-58 availability for ATGL coactivation.