Liver-specific disruption of the type 2 deiodinase gene (Alb-D2KO) results in resistance to both diet-induced obesity and liver steatosis in mice. Here, we report that this is explained by an ∼60% reduction in liver zinc-finger protein-125 (Zfp125) expression. Zfp125 is a Foxo1-inducible transcriptional repressor that causes lipid accumulation in the AML12 mouse hepatic cell line and liver steatosis in mice by reducing liver secretion of triglycerides and hepatocyte efflux of cholesterol. Zfp125 acts by repressing 18 genes involved in lipoprotein structure, lipid binding, and transport. The ApoE promoter contains a functional Zfp125-binding element that is also present in 17 other lipid-related genes repressed by Zfp125. While liver-specific knockdown of Zfp125 causes an “Alb-D2KO-like” metabolic phenotype, liver-specific normalization of Zfp125 expression in Alb-D2KO mice rescues the phenotype, restoring normal susceptibility to diet-induced obesity, liver steatosis, and hypercholesterolemia. Display omitted •Zfp125 is a liver transcriptional repressor of lipid-related genes•Hepatic Zfp125 expression is induced by fasting and Foxo1•Zfp125 reduces lipoprotein assembly and VLDL secretion•Zfp125 expression promotes lipid accumulation and liver steatosis in mice Mice with liver-specific disruption of the type 2 deiodinase gene are resistant to both diet-induced obesity and hepatosteatosis. Fernandes et al. show that this is due to a reduction in liver expression of zinc-finger protein-125, a Foxo1-inducible transcriptional repressor that causes lipid accumulation by reducing hepatic secretion of VLDL.