Despite the well-documented health benefits of ω-3 polyunsaturated fatty acids (PUFAs), their use in clinical management of hyperglycemia and obesity has shown little success. To better define the mechanisms of ω-3 PUFAs in regulating energy balance and insulin sensitivity, we deployed a transgenic mouse model capable of endogenously producing ω-3 PUFAs while reducing ω-6 PUFAs owing to the expression of a Caenorhabditis elegans fat-1 gene encoding an ω-3 fatty acid desaturase. When challenged with high-fat diets, fat-1 mice strongly resisted obesity, diabetes, hypercholesterolemia, and hepatic steatosis. Endogenous elevation of ω-3 PUFAs and reduction of ω-6 PUFAs did not alter the amount of food intake but led to increased energy expenditure in the fat-1 mice. The requirements for the levels of ω-3 PUFAs as well as the ω-6/ω-3 ratios in controlling blood glucose and obesity are much more stringent than those in lipid metabolism. These metabolic phenotypes were accompanied by attenuation of the inflammatory state because tissue levels of prostaglandin E2, leukotriene B4, monocyte chemoattractant protein-1, and TNF-α were significantly decreased. TNF-α-induced nuclear factor-κB signaling was almost completely abolished. Consistent with the reduction in chronic inflammation and a significant increase in peroxisome proliferator-activated receptor-γ activity in the fat-1 liver tissue, hepatic insulin signaling was sharply elevated. The activities of prolipogenic regulators, such as liver X receptor, stearoyl-CoA desaturase-1, and sterol regulatory element binding protein-1 were sharply decreased, whereas the activity of peroxisome proliferator-activated receptor-α, a nuclear receptor that facilitates lipid β-oxidation, was markedly increased. Thus, endogenous conversion of ω-6 to ω-3 PUFAs via fat-1 strongly protects against obesity, diabetes, inflammation, and dyslipidemia and may represent a novel therapeutic modality to treat these prevalent disorders.