SIRT1, a homolog of yeast Sir2, is a type III NAD+ dependent histone and protein deacetylase. Previous studies of mice carrying liver specific deletion of exon 4 of the Sirt1 gene revealed opposite responses of mutant mice to a high-fat diet in terms of fatty liver formation, which obscures the function of SRIT1 in liver development and lipid metabolism. To investigate this, we deleted exons 5 and 6 of Sirt1 in the liver by using a Cre-loxP approach. Western blot using an antibody to N-terminal SIRT1 does not detect a truncated protein in the liver of the mutant mice (Sirt1 flox5-6/flox5-6; Alb-Cre), suggesting a null mutation for SIRT1 is generated in the liver. Unlike the previously reported phenotypes, the Sirt1 flox5-6/flox5-6; Alb-Cre mice develop fatty liver under a normal feeding condition. The disease starts at two months of age and incidence increases as the animals become older, affecting 78% of them when they are over one year of age. We showed that the steatosis is accompanied by altered expression of a number of genes, including increased expression of ChREBP, which acts as one of the central determinants of lipid synthesis in the liver. This data uncovers an important role of SIRT1 in regulating lipid metabolism in the liver, and the SIRT1 mutant mice may serve as an animal model for studying human fatty liver disease and facilitate the development of effective therapeutic approach for the disease.