Liver fatty acid binding protein (L-FABP) is highly expressed in both enterocytes and hepatocytes and binds multiple ligands, including saturated (SFA), unsaturated fatty acids (PUFA), and cholesterol. L-fabp−/− mice were protected against obesity and hepatic steatosis on a high saturated fat (SF), high cholesterol “Western” diet and manifested a similar phenotype when fed with a high SF, low cholesterol diet. There were no significant differences in fecal fat content or food consumption between the genotypes, and fatty acid (FA) oxidation was reduced, rather than increased, in SF-fed L-fabp−/− mice as evidenced by decreased heat production and serum ketones. In contrast to mice fed with a SF diet, L-fabp−/− mice fed with a high PUFA diet were not protected against obesity and hepatic steatosis. These observations together suggest that L-fabp−/− mice exhibit a specific defect in the metabolism of SFA, possibly reflecting altered kinetics of FA utilization. In support of this possibility, microarray analysis of muscle from Western diet-fed mice revealed alterations in genes regulating glucose uptake and FA synthesis. In addition, intestinal cholesterol absorption was decreased in L-fabp−/− mice. On the other hand, and in striking contrast to other reports, female L-fabp−/− mice fed with low fat, high cholesterol diets gained slightly less weight than control mice, with minor reductions in hepatic triglyceride content. Together these data indicate a role for L-FABP in intestinal trafficking of both SFA and cholesterol.