The unfolded protein response (UPR) is linked to metabolic dysfunction, yet it is not known how endoplasmic reticulum (ER) disruption might influence metabolic pathways. Using a multilayered genetic approach, we find that mice with genetic ablations of either ER stress-sensing pathways (ATF6α, eIF2α, IRE1α) or of ER quality control (p58^IPK) share a common dysregulated response to ER stress that includes the development of hepatic microvesicular steatosis. Rescue of ER protein processing capacity by the combined action of UPR pathways during stress prevents the suppression of a subset of metabolic transcription factors that regulate lipid homeostasis. This suppression occurs in part by unresolved ER stress perpetuating expression of the transcriptional repressor CHOP. As a consequence, metabolic gene expression networks are directly responsive to ER homeostasis. These results reveal an unanticipated direct link between ER homeostasis and the transcriptional regulation of metabolism, and suggest mechanisms by which ER stress might underlie fatty liver disease.