Lipin 1 is a coregulator of DNA-bound transcription factors and a phosphatidic acid (PA) phosphatase (PAP) enzyme that catalyzes a critical step in the synthesis of glycerophospholipids. Lipin 1 is highly expressed in adipocytes, and constitutive loss of lipin 1 blocks adipocyte differentiation; however, the effects of Lpin1 deficiency in differentiated adipocytes are unknown. Here we report that adipocyte-specific Lpin1 gene recombination unexpectedly resulted in expression of a truncated lipin 1 protein lacking PAP activity but retaining transcriptional regulatory function. Loss of lipin 1-mediated PAP activity in adipocytes led to reduced glyceride synthesis and increased PA content. Characterization of the deficient mice also revealed that lipin 1 normally modulates cAMP-dependent signaling through protein kinase A to control lipolysis by metabolizing PA, which is an allosteric activator of phosphodiesterase 4 and the molecular target of rapamycin. Consistent with these findings, lipin 1 expression was significantly related to adipose tissue lipolytic rates and protein kinase A signaling in adipose tissue of obese human subjects. Taken together, our findings identify lipin 1 as a reciprocal regulator of triglyceride synthesis and hydrolysis in adipocytes, and suggest that regulation of lipolysis by lipin 1 is mediated by PA-dependent modulation of phosphodiesterase 4.