Liver fat accumulation is proposed to link obesity and insulin resistance. To dissect the role of liver fat in the insulin resistance of diet-induced obesity, we altered liver fat using a choline-deficient diet. C57Bl/6 mice were fed a low-fat (10% of calories) or high-fat (45% of calories) diet for 8 weeks; during the final 4 weeks, diets were either choline deficient or choline supplemented. In choline replete animals, high-fat feeding induced weight gain, elevated liver triglycerides (171%), hyperinsulinemia, and glucose intolerance. Choline deficiency did not affect body or adipose depot weights but amplified liver fat accumulation with high-fat diet (281%, P < 0.01). However, choline deficiency lowered fasting plasma insulin (from 983 ± 175 to 433 ± 36 pmol/l, P < 0.01) and improved glucose tolerance on a high-fat diet. In mice on 30% fat diet, choline deficiency increased liver mRNA levels of the rate-limiting enzyme in phosphatidylcholine synthesis and of enzymes involved in free fatty acid esterification, without affecting those of de novo lipogenesis or fatty acid oxidation. We conclude that liver fat accumulation per se does not cause insulin resistance during high-fat feeding and that choline deficiency may shunt potentially toxic free fatty acids toward innocuous storage triglyceride in the liver.