Intracellular lipolysis is a major pathway of lipid metabolism that has roles, not only in the provision of free fatty acids as energy substrate, but also in intracellular signal transduction. The latter is likely to be particularly important in the regulation of insulin secretion from islet -cells. The mechanisms by which lipolysis is regulated in different tissues is, therefore, of considerable interest. Here, the effects of long chain acyl-CoA esters (LC-CoA) on lipase activity in islets and adipocytes were compared. Palmitoyl-CoA (Pal-CoA, 1-10 µM) stimulated lipase activity in islets from both normal and HSL-null mice and in phosphatase-treated islets indicating that the stimulatory effect was neither on HSL nor phosphorylation-dependent. In contrast, we reproduced the previously published observations showing inhibition of HSL activity by LC-CoA in adipocytes. The inhibitory effect of LC-CoA on adipocyte HSL was dependent on phosphorylation and enhanced by acyl-CoA binding protein (ACBP). In contrast, the stimulatory effect on islet lipase activity was blocked by ACBP presumably due to binding and sequestration of LC-CoA. These data suggest the following inter-tissue relationship between islets and adipocytes with respect to fatty acid metabolism, LC-CoA signaling and lipolysis. Elevated LC-CoA in islets stimulates lipolysis to generate a signal to increase insulin secretion while elevated LC-CoA in adipocytes inhibits lipolysis. Together these opposite actions of LC-CoA lower circulating fat by inhibiting its release from adipocytes and promoting fat storage via insulin action.