Perturbations in hepatic lipid homeostasis are linked to the development of obesity-related steatohepatitis. Mutations in the gene encoding lipin 1 cause hepatic steatosis in fld mice, a genetic model of lipodystrophy. However, the molecular function of lipin 1 is unclear. Herein, we demonstrate that the expression of lipin 1 is induced by peroxisome proliferator-activated receptor gamma (PPARgamma) coactivator 1alpha (PGC-1alpha), a transcriptional coactivator controlling several key hepatic metabolic pathways. Gain-of-function and loss-of-function strategies demonstrated that lipin selectively activates a subset of PGC-1alpha target pathways, including fatty acid oxidation and mitochondrial oxidative phosphorylation, while suppressing the lipogenic program and lowering circulating lipid levels. Lipin activates mitochondrial fatty acid oxidative metabolism by inducing expression of the nuclear receptor PPARalpha, a known PGC-1alpha target, and via direct physical interactions with PPARalpha and PGC-1alpha. These results identify lipin 1 as a selective physiological amplifier of the PGC-1alpha/PPARalpha-mediated control of hepatic lipid metabolism.