XBP1 is a transcription factor that regulates hepatic lipogenesis. This study shows that XBP1 is required for normal fatty acid synthesis in the liver. XBP1 expression is induced in the liver by a high carbohydrate diet and directly controls the induction of critical genes involved in fatty acid synthesis. Inducible deletion of XBP1 in the liver resulted in hypocholesterolemia and hypotriglyceridemia, without causing hepatic steatosis or significant compromise in protein secretory function. XBP1 is also required for embryonic liver development. XBP1 deficiency did not cause ER stress, but IRE1α, the upstream activator of XBP1, was constitutively active. XBP1 is involved in membrane lipid synthesis in the ER and regulates fatty acid synthesis in the liver. XBP1 deficiency led to decreased expression of lipogenic genes such as Scd1, Dgat2, and Acc2. XBP1 regulates a subset of lipogenic genes in an SREBP and ChREBP independent manner. High carbohydrate diets induce XBP1s in the liver and directly activate the transcription of key lipogenic genes. XBP1 has at least two distinct roles: in some organs and cells, it is required for protein secretion, while in others, such as adult liver, it controls select transcriptional programs such as lipogenesis. The findings suggest that compounds that inhibit XBP1 activation in the liver may reduce serum lipids without causing hepatic steatosis in patients with dyslipidemias. XBP1's function in regulating lipogenesis is unrelated to its function as a mediator of the ER stress response. XBP1 deficiency did not significantly compromise hepatocyte protein secretory function, likely because XBP1 independent basal chaperone gene expression is sufficient to accommodate moderate secretory loads. The nature of the feedback loop that maintains XBP1s protein levels even in the absence of ER stress requires further investigation.XBP1 is a transcription factor that regulates hepatic lipogenesis. This study shows that XBP1 is required for normal fatty acid synthesis in the liver. XBP1 expression is induced in the liver by a high carbohydrate diet and directly controls the induction of critical genes involved in fatty acid synthesis. Inducible deletion of XBP1 in the liver resulted in hypocholesterolemia and hypotriglyceridemia, without causing hepatic steatosis or significant compromise in protein secretory function. XBP1 is also required for embryonic liver development. XBP1 deficiency did not cause ER stress, but IRE1α, the upstream activator of XBP1, was constitutively active. XBP1 is involved in membrane lipid synthesis in the ER and regulates fatty acid synthesis in the liver. XBP1 deficiency led to decreased expression of lipogenic genes such as Scd1, Dgat2, and Acc2. XBP1 regulates a subset of lipogenic genes in an SREBP and ChREBP independent manner. High carbohydrate diets induce XBP1s in the liver and directly activate the transcription of key lipogenic genes. XBP1 has at least two distinct roles: in some organs and cells, it is required for protein secretion, while in others, such as adult liver, it controls select transcriptional programs such as lipogenesis. The findings suggest that compounds that inhibit XBP1 activation in the liver may reduce serum lipids without causing hepatic steatosis in patients with dyslipidemias. XBP1's function in regulating lipogenesis is unrelated to its function as a mediator of the ER stress response. XBP1 deficiency did not significantly compromise hepatocyte protein secretory function, likely because XBP1 independent basal chaperone gene expression is sufficient to accommodate moderate secretory loads. The nature of the feedback loop that maintains XBP1s protein levels even in the absence of ER stress requires further investigation.