Selenium (Se) is an essential trace element used for biosynthesis of selenoproteins and is acquired either through diet or cellular recycling mechanisms. Selenocysteine lyase (Scly) is the enzyme that supplies Se for selenoprotein biosynthesis via decomposition of the amino acid selenocysteine (Sec). Knockout (KO) of Scly in a mouse affected hepatic glucose and lipid homeostasis. Mice lacking Scly and raised on an Se-adequate diet exhibit hyperinsulinemia, hyperleptinemia, glucose intolerance, and hepatic steatosis, with increased hepatic oxidative stress, but maintain selenoprotein levels and circulating Se status. Insulin challenge of Scly KO mice results in attenuated Akt phosphorylation but does not decrease phosphorylation levels of AMP kinase alpha (AMPKα). Upon dietary Se restriction, Scly KO animals develop several characteristics of metabolic syndrome, such as obesity, fatty liver, and hypercholesterolemia, with aggravated hyperleptinemia, hyperinsulinemia, and glucose intolerance. Hepatic glutathione peroxidase 1 (GPx1) and selenoprotein S (SelS) production and circulating selenoprotein P (Sepp1) levels are significantly diminished. Scly disruption increases the levels of insulin-signaling inhibitor PTP1B. Our results suggest a dependence of glucose and lipid homeostasis on Scly activity. These findings connect Se and energy metabolism and demonstrate for the first time a unique physiological role of Scly in an animal model.