Stimulation of the ghrelin receptor (GhrR) by ghrelin results in a variety of metabolic changes including increased food intake, fat storage and insulin resistance. Loss of ghrelin signaling is protective against diet-induced obesity, suggesting that ghrelin plays a significant homeostatic role in conditions of metabolic stress. We examined glycemic control in GhrR -/- mice fed a high-fat diet, and used indirect calorimetry to assess fuel substrate usage and energy expenditure. GhrR -/- mice fed a high-fat diet had several measures of greater insulin sensitivity, including: lower fasted blood glucose and plasma insulin, lower %Hb(A1c), lower insulin levels during glucose tolerance tests, and improved performance in hyperinsulinemic-euglycemic and hyperglycemic clamp studies. GhrR -/- mice fed a high-fat diet did not develop hepatic steatosis and had lower total cholesterol, relative to controls. Furthermore, GhrR -/- mice demonstrated a lower intestinal triglyceride secretion rate of dietary lipid. GhrR -/- mice have higher respiratory quotients (RQ), indicating a preference for carbohydrate as fuel. The range of RQ values was wider in GhrR -/- mice, indicating greater metabolic flexibility and insulin sensitivity in these animals. We therefore propose that loss of ghrelin signaling promotes insulin sensitivity and metabolic flexibility, and protects against several fatty diet-induced features of metabolic syndrome due to convergent changes in the intake, absorption and utilization of energy.