When energy is needed, white adipose tissue (WAT) provides fatty acids (FAs) for use in peripheral tissues via stimulation of fat cell lipolysis. FAs have been postulated to play a critical role in the development of obesity-induced insulin resistance, a major risk factor for diabetes and cardiovascular disease. However, whether and how chronic inhibition of fat mobilization from WAT modulates insulin sensitivity remains elusive. Hormone-sensitive lipase (HSL) participates in the breakdown of WAT triacylglycerol into FAs. HSL haploinsufficiency and treatment with a HSL inhibitor resulted in improvement of insulin tolerance without impact on body weight, fat mass, and WAT inflammation in high-fat-diet-fed mice. In vivo palmitate turnover analysis revealed that blunted lipolytic capacity is associated with diminution in FA uptake and storage in peripheral tissues of obese HSL haploinsufficient mice. The reduction in FA turnover was accompanied by an improvement of glucose metabolism with a shift in respiratory quotient, increase of glucose uptake in WAT and skeletal muscle, and enhancement of de novo lipogenesis and insulin signalling in liver. In human adipocytes, HSL gene silencing led to improved insulin-stimulated glucose uptake, resulting in increased de novo lipogenesis and activation of cognate gene expression. In clinical studies, WAT lipolytic rate was positively and negatively correlated with indexes of insulin resistance and WAT de novo lipogenesis gene expression, respectively. In obese individuals, chronic inhibition of lipolysis resulted in induction of WAT de novo lipogenesis gene expression. Thus, reduction in WAT lipolysis reshapes FA fluxes without increase of fat mass and improves glucose metabolism through cell-autonomous induction of fat cell de novo lipogenesis, which contributes to improved insulin sensitivity.