The liver integrates multiple metabolic pathways to warrant systemic energy homeostasis. An excessive lipogenic flux due to chronic dietary stimulation contributes to the development of hepatic steatosis, dyslipidemia and hyperglycemia. Here we show that the oxidoreductase retinol saturase (RetSat) is involved in the development of fatty liver. Hepatic RetSat expression correlates with steatosis and serum triglycerides (TGs) in humans. Liver-specific depletion of RetSat in dietary obese mice lowers hepatic and circulating TGs and normalizes hyperglycemia. Mechanistically, RetSat depletion reduces the activity of carbohydrate response element binding protein (ChREBP), a cellular hexose-phosphate sensor and inducer of lipogenesis. Defects upon RetSat depletion are rescued by ectopic expression of ChREBP but not by its putative enzymatic product 13,14-dihydroretinol, suggesting that RetSat affects hepatic glucose sensing independent of retinol conversion. Thus, RetSat is a critical regulator of liver metabolism functioning upstream of ChREBP. Pharmacological inhibition of liver RetSat may represent a therapeutic approach for steatosis.