In mammals, the liver integrates nutrient uptake and delivery of carbohydrates and lipids to peripheral tissues to control overall energy balance. Hepatocytes maintain metabolic homeostasis by coordinating gene expression programs in response to dietary and systemic signals. Hepatic tissue oxygenation is an important systemic signal that contributes to normal hepatocyte function as well as disease. Hypoxia-inducible factors 1 and 2 (HIF-1 and HIF-2, respectively) are oxygen-sensitive heterodimeric transcription factors, which act as key mediators of cellular adaptation to low oxygen. Previously, we have shown that HIF-2 plays an important role in both physiologic and pathophysiologic processes in the liver. HIF-2 is essential for normal fetal EPO production and erythropoiesis, while constitutive HIF-2 activity in the adult results in polycythemia and vascular tumorigenesis. Here we report a novel role for HIF-2 in regulating hepatic lipid metabolism. We found that constitutive activation of HIF-2 in the adult results in the development of severe hepatic steatosis associated with impaired fatty acid β-oxidation, decreased lipogenic gene expression, and increased lipid storage capacity. These findings demonstrate that HIF-2 functions as an important regulator of hepatic lipid metabolism and identify HIF-2 as a potential target for the treatment of fatty liver disease.