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To discuss transcriptional mechanisms regulating hepatic lipid metabolism.Humans who are obese or have diabetes (NIDDM) or metabolic syndrome (MetS) have low blood and tissue levels of C20–22 polyunsaturated fatty acids (PUFAs). Although the impact of low C20–22 PUFAs on disease progression in humans is not fully understood, studies with mice have provided clues suggesting that impaired PUFA metabolism may contribute to the severity of risk factors associated with NIDDM and MetS. High fat diets promote hyperglycemia, insulin resistance and fatty liver in C57BL/6J mice, an effect that correlates with suppressed expression of enzymes involved in PUFA synthesis and decreased hepatic C20–22 PUFA content. A/J mice, in contrast, are resistant to diet-induced obesity and diabetes; these mice have elevated expression of hepatic enzymes involved in PUFA synthesis and C20–22 PUFA content. Moreover, loss-of-function and gain-of-function studies have identified fatty acid elongase (Elovl5), a key enzyme involved in PUFA synthesis, as a regulator of hepatic lipid and carbohydrate metabolism. Elovl5 activity regulates hepatic C20–22 PUFA content, signaling pathways (Akt and PP2A) and transcription factors (SREBP-1, PPARα, FoxO1 and PGC1α) that control fatty acid synthesis and gluconeogenesis.These studies may help define novel strategies to control fatty liver and hyperglycemia associated with NIDDM and MetS.