Ces1g/Es-x deficiency in mice results in weight gain, insulin resistance, fatty liver and hyperlipidemia through upregulation of de novo lipogenesis and oversecretion of triacylglycerol (TG)-rich lipoproteins. Here, we show that restoration of Ces1g/Es-x expression only in the liver significantly reduced hepatic TG concentration accompanied by decreased size of lipid droplets, reduced secretion of very low-density lipoproteins and improved insulin-mediated signal transduction in the liver. Collectively, these results demonstrate that hepatic Ces1g/Es-x plays a critical role in limiting hepatic steatosis, very low-density lipoprotein assembly and in augmenting insulin sensitivity.