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D iet-induced obesity (DIO) leads to inflammatory activation of macrophages in white adipose tissue (WAT) and subsequently to insulin resistance. PPARγ agonists are antidiabetic agents known to suppress inflammatory macrophage activation and to induce expression of the triacylglycerol (TG) synthesis enzyme acyl CoA:diacylglycerol acyltransferase 1 (DGAT1) in WAT and in adipocytes. Here, we investigated in mice the relationship between macrophage lipid storage capacity and DIO-associated inflammatory macrophage activation. Mice overexpressing DGAT1 in both macrophages and adipocytes (referred to herein as aP2-Dgat1 mice) were more prone to DIO but were protected against inflammatory macrophage activation, macrophage accumulation in WAT, systemic inflammation, and insulin resistance. To assess the contribution of macrophage DGAT1 expression to this phenotype, we transplanted wild-type mice with aP2-Dgat1 BM. These mice developed DIO similar to that of control mice but retained the protection from WAT inflammation and insulin resistance seen in aP2-Dgat1 mice. In isolated macrophages, Dgat1 mRNA levels correlated directly with TG storage capacity and inversely with inflammatory activation by saturated fatty acids (FAs). Moreover, PPARγ agonists increased macrophage Dgat1 mRNA levels, and the protective effects of these agonists against FA-induced inflammatory macrophage activation were absent in macrophages isolated from Dgat1-null mice. Thus, increasing DGAT1 expression in murine macrophages increases their capacity for TG storage, protects against FA-induced inflammatory activation, and is sufficient to reduce the inflammatory and metabolic consequences of DIO.