We previously identified Nob1 as a quantitative trait locus for high-fat diet-induced obesity and diabetes in genome-wide scans of outcross populations of obese and lean mouse strains. Additional crossbreeding experiments indicated that Nob1 represents an obesity suppressor from the lean Swiss Jim Lambert (SJL) strain. Here we identify a SJL-specific mutation in the Tbc1d1 gene that results in a truncated protein lacking the TBC Rab-GTPase-activating protein domain. TBC1D1, which has been recently linked to human obesity, is related to the insulin signaling protein AS160 and is predominantly expressed in skeletal muscle. Knockdown of TBC1D1 in skeletal muscle cells increased fatty acid uptake and oxidation, whereas overexpression of TBC1D1 had the opposite effect. Recombinant congenic mice lacking TBC1D1 showed reduced body weight, decreased respiratory quotient, increased fatty acid oxidation and reduced glucose uptake in isolated skeletal muscle. Our data strongly suggest that mutation of Tbc1d1 suppresses high-fat diet-induced obesity by increasing lipid use in skeletal muscle.