Thioesterase superfamily member 1 (Them1) is an acyl-CoA thioesterase that is highly expressed in brown adipose tissue, where it functions to suppress energy expenditure. Lower Them1 expression levels in the liver are upregulated in response to high-fat feeding. Them1^-/- mice are resistant to diet-induced obesity, hepatic steatosis, and glucose intolerance, but the contribution of Them1 in liver is unclear. To examine its liver-specific functions, we created conditional transgenic mice, which, when bred to Them1^-/- mice and activated, expressed Them1 exclusively in the liver. Mice with liver-specific Them1 expression exhibited no changes in energy expenditure. Rates of fatty acid oxidation were increased, whereas hepatic VLDL triglyceride secretion rates were decreased by hepatic Them1 expression. When fed a high-fat diet, Them1 expression in liver promoted excess steatosis in the setting of reduced rates of fatty acid oxidation and preserved glycerolipid synthesis. Liver-specific Them1 expression did not influence glucose tolerance or insulin sensitivity, but did promote hepatic gluconeogenesis in high-fat-fed animals. This was attributable to the generation of excess fatty acids, which activated PPARα and promoted expression of gluconeogenic genes. These findings reveal a regulatory role for Them1 in hepatocellular fatty acid trafficking.