Acyl coenzyme A:diacylglycerol acyltransferase 1 (DGAT1) is one of the four intestinal membrane bound acyltransferases implicated in dietary fat absorption. Recently, it was found that, in addition to acylating diacylglycerol (DAG), DGAT1 also possesses robust enzymatic activity for acylating monoacylglycerol (MAG) (Yen, C. L., Monetti, M., Burri, B. J., and Farese, R. V., Jr. (2005) J. Lipid Res. 46, 1502-1511). In the current paper, we have conducted a detailed characterization of this reaction in test tube, intact cell culture, and animal models. Enzymatically, we found that triacylglycerol (TAG) synthesis from MAG by DGAT1 does not behave according to classic Michaelis-Menten kinetics. At low concentrations of 2-MAG (<50 microm), the major acylation product by DGAT1 was TAG; however, increased concentrations of 2-MAG (50-200 microm) resulted in decreased TAG formation. This unique product/substrate relationship is similar to MGAT3 but distinct from DGAT2 and MGAT2. We have also found that XP620 is an inhibitor that selectively inhibits the acylation of MAG by DGAT1 (IC(50) of human DGAT1: 16.6+/-4.0 nM (MAG as substrate) and 1499+/-318 nM (DAG as substrate); IC(50) values of human DGAT2, MGAT2, and MGAT3 are >30,000 nM). Using this pharmacological tool, we have shown that approximately 76 and approximately 89% of the in vitro TAG synthesis initiated from MAG is mediated by DGAT1 in Caco-2 cell and rat intestinal mucosal membranes, respectively. When applied to intact cultured cells, XP620 substantially decreased but did not abolish apoB secretion in differentiated Caco-2 cells. It also decreased TAG and DAG syntheses in primary enterocytes. Last, when delivered orally to rats, XP620 decreased absorption of orally administered lipids by approximately 50%. Based on these data, we conclude that the acylation of acylglycerols by DGAT1 is important for dietary fat absorption in the intestine.