The intracellular storage and utilization of lipids are critical to maintain cellular energy homeostasis. During nutrient deprivation, cellular lipids stored as triglycerides in lipid droplets are hydrolysed into fatty acids for energy. A second cellular response to starvation is the induction of autophagy, which delivers intracellular proteins and organelles sequestered in double-membrane vesicles (autophagosomes) to lysosomes for degradation and use as an energy source. Lipolysis and autophagy share similarities in regulation and function but are not known to be interrelated. Here we show a previously unknown function for autophagy in regulating intracellular lipid stores (macrolipophagy). Lipid droplets and autophagic components associated during nutrient deprivation, and inhibition of autophagy in cultured hepatocytes and mouse liver increased triglyceride storage in lipid droplets. This study identifies a critical function for autophagy in lipid metabolism that could have important implications for human diseases with lipid over-accumulation such as those that comprise the metabolic syndrome.