The endoplasmic reticulum (ER) is the cellular organelle responsible for protein folding and assembly, lipid and sterol biosynthesis, and calcium storage. The unfolded protein response (UPR) is an adaptive intracellular stress response to accumulation of unfolded or misfolded proteins in the ER. In this study, we show that the most conserved UPR sensor inositol-requiring enzyme 1 α (IRE1α), an ER transmembrane protein kinase/endoribonuclease, is required to maintain hepatic lipid homeostasis under ER stress conditions through repressing hepatic lipid accumulation and maintaining lipoprotein secretion. To elucidate physiological roles of IRE1α-mediated signalling in the liver, we generated hepatocyte-specific Ire1α-null mice by utilizing an albumin promoter-controlled Cre recombinase-mediated deletion. Deletion of Ire1α caused defective induction of genes encoding functions in ER-to-Golgi protein transport, oxidative protein folding, and ER-associated degradation (ERAD) of misfolded proteins, and led to selective induction of pro-apoptotic UPR trans-activators. We show that IRE1α is required to maintain the secretion efficiency of selective proteins. In the absence of ER stress, mice with hepatocyte-specific Ire1α deletion displayed modest hepatosteatosis that became profound after induction of ER stress. Further investigation revealed that IRE1α represses expression of key metabolic transcriptional regulators, including CCAAT/enhancer-binding protein (C/EBP) β, C/EBPδ, peroxisome proliferator-activated receptor γ (PPARγ), and enzymes involved in triglyceride biosynthesis. IRE1α was also found to be required for efficient secretion of apolipoproteins upon disruption of ER homeostasis. Consistent with a role for IRE1α in preventing intracellular lipid accumulation, mice with hepatocyte-specific deletion of Ire1α developed severe hepatic steatosis after treatment with an ER stress-inducing anti-cancer drug Bortezomib, upon expression of a misfolding-prone human blood clotting factor VIII, or after partial hepatectomy. The identification of IRE1α as a key regulator to prevent hepatic steatosis provides novel insights into ER stress mechanisms in fatty liver diseases associated with toxic liver injuries.