Stearoyl–CoA desaturase (SCD) is a central lipogenic enzyme catalyzing the synthesis of monounsaturated fatty acids, mainly oleate (C18:1) and palmitoleate (C16:1), which are components of membrane phospholipids, triglycerides, wax esters, and cholesterol esters. Several SCD isoforms (SCD1-3) exist in the mouse. Here we show that mice with a targeted disruption of the SCD1 isoform have reduced body adiposity, increased insulin sensitivity, and are resistant to diet-induced weight gain. The protection from obesity involves increased energy expenditure and increased oxygen consumption. Compared with the wild-type mice the SCD1−/− mice have increased levels of plasma ketone bodies but reduced levels of plasma insulin and leptin. In the SCD1−/− mice, the expression of several genes of lipid oxidation are up-regulated, whereas lipid synthesis genes are down-regulated. These observations suggest that a consequence of SCD1 deficiency is an activation of lipid oxidation in addition to reduced triglyceride synthesis and storage.