Hormone-sensitive lipase (HSL) is expressed predominantly in white and brown adipose tissue where it is believed to play a crucial role in the lipolysis of stored triglycerides (TG), thereby providing the body with energy substrate in the form of free fatty acids (FFA). From in vitro assays, HSL is known to hydrolyze TG, diglycerides (DG), cholesteryl esters, and retinyl esters. In the current study we have generated HSL knock-out mice and demonstrate three lines of evidence that HSL is instrumental in the catabolism of DG in vivo. First, HSL deficiency in mice causes the accumulation of DG in white adipose tissue, brown adipose tissue, skeletal muscle, cardiac muscle, and testis. Second, when tissue extracts were used in an in vitro lipase assay, a reduced FFA release and the accumulation of DG was observed in HSL knock-out mice which did not occur when tissue extracts from control mice were used. Third, in vitro lipolysis experiments with HSL-deficient fat pads demonstrated that the isoproterenol-stimulated release of FFA was decreased and DG accumulated intracellularly resulting in the essential absence of the isoproterenol-stimulated glycerol formation typically observed in control fat pads. Additionally, the absence of HSL in white adipose tissue caused a shift of the fatty acid composition of the TG moiety toward increased long chain fatty acids implying a substrate specificity of the enzyme in vivo. From these in vivo results we conclude that HSL is the rate-limiting enzyme for the cellular catabolism of DG in adipose tissue and muscle.