Although obesity is associated with multiple features of the metabolic syndrome (insulin resistance, leptin resistance, hepatic steatosis, chronic inflammation etc), the molecular changes that promote these conditions are not completely understood. Here, we tested the hypothesis that elevated ceramide biosynthesis contributes to the pathogenesis of obesity and the metabolic syndrome. Chronic treatment for 8 weeks of genetically obese (ob/ob), and, high fat diet induced obese (DIO) mice with myriocin, an inhibitor of de novo ceramide synthesis, decreased circulating ceramides. Decreased ceramide was associated with reduced weight, enhanced metabolism and energy expenditure, decreased hepatic steatosis and improved glucose hemostasis via enhancement of insulin signaling in the liver and muscle. Inhibition of de novo ceramide biosynthesis decreased adipose expression of suppressor of cytokine signaling-3 (SOCS-3) and induced adipose uncoupling protein 3 (UCP-3). Moreover, ceramide directly induced SOCS-3 and inhibited UCP-3 mRNA in cultured adipocytes suggesting a direct role for ceramide in regulation of metabolism and energy expenditure. Inhibition of de novo ceramide synthesis had no effect on adipose tumor necrosis factor- (TNF-) expression, but dramatically reduced adipose plasminogen activator inhibitor-1 (PAI-1) and monocyte chemoattactant protein 1 (MCP-1). This study highlights a novel role for ceramide biosynthesis in body weight regulation, energy expenditure and the metabolic syndrome.