Ghrelin O-acyltransferase (GOAT) attaches octanoate to proghrelin, which is processed to ghrelin, an octanoylated peptide hormone that stimulates release of growth hormone (GH) from pituitary cells. Elimination of the gene encoding ghrelin or its receptor produces only mild phenotypes in mice. Thus, the essential function of ghrelin is obscure. Here, we eliminate the Goat gene in mice, thereby eliminating all octanoylated ghrelin from blood. On normal or high fat diets, Goat^−/− mice grew and maintained the same weights as wild-type (WT) littermates. When subjected to 60% calorie restriction, WT and Goat^−/− mice both lost 30% of body weight and 75% of body fat within 4 days. In both lines, fasting blood glucose initially declined equally. After 4 days, glucose stabilized in WT mice at 58–76 mg/dL. In Goat^−/− mice, glucose continued to decline, reaching 12–36 mg/dL on day 7. At this point, WT mice showed normal physical activity, whereas Goat^−/− mice were moribund. GH rose progressively in calorie-restricted WT mice and less in Goat^−/− mice. Infusion of either ghrelin or GH normalized blood glucose in Goat^−/− mice and prevented death. Thus, an essential function of ghrelin in mice is elevation of GH levels during severe calorie restriction, thereby preserving blood glucose and preventing death.