Lipid droplets (LDs) provide a reservoir for triacylglycerol storage and are a central hub for fatty acid trafficking and signaling in cells. Lipolysis promotes mitochondrial biogenesis and oxidative metabolism via a SIRT1/PGC-1α/PPARα-dependent pathway through an unknown mechanism. Herein, we identify that monounsaturated fatty acids (MUFAs) allosterically activate SIRT1 toward select peptide-substrates such as PGC-1α. MUFAs enhance PGC-1α/PPARα signaling and promote oxidative metabolism in cells and animal models in a SIRT1-dependent manner. Moreover, we characterize the LD protein perilipin 5 (PLIN5), which is known to enhance mitochondrial biogenesis and function, to be a fatty-acid-binding protein that preferentially binds LD-derived monounsaturated fatty acids and traffics them to the nucleus following cAMP/PKA-mediated lipolytic stimulation. Thus, these studies identify the first-known endogenous allosteric modulators of SIRT1 and characterize a LD-nuclear signaling axis that underlies the known metabolic benefits of MUFAs and PLIN5.