Ceramide synthases are highly conserved transmembrane proteins involved in the biosynthesis of sphingolipids, which are essential structural components of eukaryotic membranes and can act as second messengers regulating tissue homeostasis. However, the role of these enzymes in development is poorly understood due to the lack of animal models. We identified schlank as a new Drosophila member of the ceramide synthase family. We demonstrate that schlank is involved in the de novo synthesis of a broad range of ceramides, the key metabolites of sphingolipid biosynthesis. Unexpectedly, schlank mutants also show reduction of storage fat, which is deposited as triacylglyerols in the fat body. We found that schlank can positively regulate fatty acid synthesis by promoting the expression of sterol-responsive element-binding protein (SREBP) and SREBP-target genes. It further prevents lipolysis by downregulating the expression of triacylglycerol lipase. Our results identify schlank as a new regulator of the balance between lipogenesis and lipolysis in Drosophila. Furthermore, our studies of schlank and the mammalian Lass2 family member suggest a novel role for ceramide synthases in regulating body fat metabolism.