The effect of decreased fatty acid oxidation on liver lipid metabolism in HcB-19 mice, a mouse model of hyperlipidemia (Txnip-/-), was investigated using metabolic labeling. De novo cholesterol synthesis and de novo lipogenesis were quantified using 1-13C1 acetic acid, and liver triacylglycerol (TAG) derived from dietary fatty acids was quantified using dietary glyceryl tri(hexandecanoate-d31). Tissue samples were analyzed for TAG, free cholesterol (FC), and cholesterol ester (CE) content. Txnip-/- mice had significantly elevated (P < 0.05) serum nonesterified fatty acids compared with wild-type (WT) littermates; their livers weighed more and contained more TAG and total cholesterol. Txnip-/- liver also contained measurable CE; CE was not detectable in WT mice. Liver CE content was elevated despite lower cholesterol fractional synthesis rates (16 vs. 31%/d in Txnip-/- and WT mice, respectively). FC absolute synthesis rate (ASR) in WT mice (0.28 ± 0.0 μmol/d) was similar to the combined synthesis rates of FC (0.13 ± 0.10 μmol/d) and CE (0.10 ± 0.00 μmol/d) in Txnip-/- mice. Lipogenesis, as assessed by TAG-palmitate ASR, was significantly greater in Txnip-/- mice (1.47 ± 0.08 vs. 0.49 ± 0.06 μmol/d) and liver fatty acid synthase activity was also higher (7.96 ± 2.53 vs. 4.83 ± 1.44 U/mg protein). Both elevated lipogenesis and increased fatty acid reesterification to glycerol and cholesterol contributed to fat in the livers of Txnip-/- mice. These data support elevated fatty acid synthesis as the primary contributor to liver TAG in Txnip-/- mice, although increased esterification of fatty acids also contributed to excess liver TAG. The absolute total cholesterol synthesis rate was not altered, but esterification of fatty acids to cholesterol provided an additional means to buffer physiologically the negative results of excess fatty acid availability. J. Nutr. 134: 1475-1480, 2004.