The epidemic of obesity and diabetes is causing an increased incidence of dyslipidemia-related heart failure. While the primary etiology of lipotoxic cardiomyopathy is an elevation of lipid levels resulting from an imbalance in energy availability and expenditure, increasing evidence suggests a relationship between dysregulation of membrane phospholipid homeostasis and lipid-induced cardiomyopathy. In the present study, we report that the Drosophila easily shocked (eas) mutants that harbor a disturbance in phosphatidylethanolamine (PE) synthesis display tachycardia and defects in cardiac relaxation and are prone to developing cardiac arrest and fibrillation under stress. The eas mutant hearts exhibit elevated concentrations of triglycerides, suggestive of a metabolic, diabetic-like heart phenotype. Moreover, the low PE levels in eas flies mimic the effects of cholesterol deficiency in vertebrates by stimulating the Drosophila sterol regulatory element-binding protein (dSREBP) pathway. Significantly, cardiac-specific elevation of dSREBP signaling adversely affects heart function, reflecting the cardiac eas phenotype, whereas suppressing dSREBP or lipogenic target gene function in eas hearts rescues the cardiac hyperlipidemia and heart function disorders. These findings suggest that dysregulated phospholipid signaling that alters SREBP activity contributes to the progression of impaired heart function in flies and identifies a potential link to lipotoxic cardiac diseases in humans.