Liver fatty acid (FA)-binding protein (L-Fabp), a cytoplasmic protein expressed in liver and small intestine, regulates FA trafficking in vitro and plays an important role in diet-induced obesity. We observed that L-Fabp(-/-) mice are protected against Western diet-induced obesity and hepatic steatosis. These findings are in conflict, however, with another report of exaggerated obesity and increased hepatic steatosis in female L-Fabp(-/-) mice fed a cholesterol-supplemented diet. To resolve this apparent paradox, we fed female L-Fabp(-/-) mice two different cholesterol-supplemented low-fat diets and discovered (on both diets) lower body weight in L-Fabp(-/-) mice than in congenic wild-type C57BL/6J controls and similar or reduced hepatic triglyceride content. We extended these comparisons to mice fed low-cholesterol, high-fat diets. Female L-Fabp(-/-) mice fed a high-saturated fat (SF) diet were dramatically protected against obesity and hepatic steatosis, whereas weight gain and hepatic lipid content were indistinguishable between mice fed a high-polyunsaturated FA (PUFA) diet and control mice. These findings demonstrate that L-Fabp functions as a metabolic sensor with a distinct hierarchy of FA sensitivity. We further conclude that cholesterol supplementation does not induce an obesity phenotype in L-Fabp(-/-) mice, nor does it play a significant role in the protection against Western diet-induced obesity in this background.