Although liver fatty acid-binding protein (L-FABP) is an important binding site for various hydrophobic ligands in hepatocytes, its in vivo significance is not understood. We have therefore created L-FABP null mice and report here their initial analysis, focusing on the impact of this mutation on hepatic fatty acid binding capacity, lipid composition, and expression of other lipid-binding proteins. Gel-filtered cytosol from L-FABP null liver lacked the main fatty acid binding peak in the fraction that normally comprises both L-FABP and sterol carrier protein-2 (SCP-2). The binding capacity for cis-parinaric acid was decreased >80% in this region. Molar ratios of cholesterol/cholesterol ester, cholesteryl ester/triglyceride, and cholesterol/phospholipid were 2- to 3-fold greater, reflecting up to 3-fold absolute increases in specific lipid classes in the order cholesterol > cholesterol esters > phospholipids. In contrast, the liver pool sizes of nonesterified fatty acids and triglycerides were not altered. However, hepatic deposition of a bolus of intravenously injected [14C]oleate was markedly reduced, showing altered lipid pool turnover. An increase of approximately 75% of soluble SCP-2 but little or no change of other soluble (glutathione S-transferase, albumin) and membrane (fatty acid transport protein, CD36, aspartate aminotransferase, caveolin) fatty acid transporters was measured. These results (i) provide for the first time a quantitative assessment of the contribution of L-FABP to cytosolic fatty acid binding capacity, (ii) establish L-FABP as an important determinant of hepatic lipid composition and turnover, and (iii) suggest that SCP-2 contributes to the accumulation of cholesterol in L-FABP null liver.