[show abstract][hide abstract] ABSTRACT: Mutations of comparative gene identification 58 (CGI-58) in humans cause Chanarin-Dorfman syndrome, a rare autosomal recessive disease in which excess triacylglycerol (TAG) accumulates in multiple tissues. CGI-58 recently has been ascribed two distinct biochemical activities, including coactivation of adipose triglyceride lipase and acylation of lysophosphatidic acid (LPA). It is noteworthy that both the substrate (LPA) and the product (phosphatidic acid) of the LPA acyltransferase reaction are well-known signaling lipids. Therefore, we hypothesized that CGI-58 is involved in generating lipid mediators that regulate TAG metabolism and insulin sensitivity. Here, we show that CGI-58 is required for the generation of signaling lipids in response to inflammatory stimuli and that lipid second messengers generated by CGI-58 play a critical role in maintaining the balance between inflammation and insulin action. Furthermore, we show that CGI-58 is necessary for maximal TH1 cytokine signaling in the liver. This novel role for CGI-58 in cytokine signaling may explain why diminished CGI-58 expression causes severe hepatic lipid accumulation yet paradoxically improves hepatic insulin action. Collectively, these findings establish that CGI-58 provides a novel source of signaling lipids. These findings contribute insight into the basic mechanisms linking TH1 cytokine signaling to nutrient metabolism.