The common complications in obesity and type 2 diabetes include hepatic steatosis and disruption of glucose-glycogen homeostasis, leading to hyperglycemia. Fatty acid translocase (FAT/CD36), whose expression is inducible in obesity, is known for its function in fatty acid uptake. Previous work by us and others suggested that CD36 plays an important role in hepatic lipid homeostasis, but the results have been conflicting and the mechanisms were not well understood. In this study, by using CD36- overexpressing transgenic (CD36Tg) mice, we uncovered a surprising function of CD36 in regulating glycogen homeostasis. Overexpression of CD36 promoted glycogen synthesis, and as a result, CD36Tg mice were protected from fasting hypoglycemia. When challenged with a high-fat diet (HFD), CD36Tg mice showed unexpected attenuation of hepatic steatosis, increased very low-density lipoprotein (VLDL) secretion, and improved glucose tolerance and insulin sensitivity. The HFD-fed CD36Tg mice also showed decreased levels of proinflammatory hepatic prostaglandins and 20-hydroxyeicosatetraenoic acid (20-HETE), a potent vasoconstrictive and proinflammatory arachidonic acid metabolite. We propose that CD36 functions as a protective metabolic sensor in the liver under lipid overload and metabolic stress. CD36 may be explored as a valuable therapeutic target for the management of metabolic syndrome.