The lipid droplet-associated fat specific protein 27 (FSP27) suppresses lipolysis and thereby enhances triglyceride accumulation in adipocytes. We and others have recently found FSP27 to be a remarkably short-lived protein (half-life, 15 min) due to its rapid ubiquitination and proteasomal degradation. Thus, we tested the hypothesis that lipolytic agents such as tumor necrosis factor-α (TNF-α) and isoproterenol modulate FSP27 levels to regulate FFA release. Consistent with this concept, we showed that the lipolytic actions of TNF-α, interleukin-1β (IL-1β), and IFN-γ are accompanied by marked decreases in FSP27 expression and lipid droplet size in mouse adipocytes. Similar depletion of FSP27 using short interfering RNA (siRNA) mimicked the lipolysis-enhancing effect of TNF-α, while maintaining stable FSP27 levels using expression of hemagglutinin epitope-tagged FSP27 blocked TNF-α-mediated lipolysis. In contrast, we show the robust lipolytic action of isoproterenol is paradoxically associated with increases in FSP27 levels and a delayed degradation rate corresponding to decreased ubiquitination. This catecholamine-mediated increase in FSP27 abundance, probably a feedback mechanism for restraining excessive lipolysis by catecholamines, is mimicked by forskolin or 8-bromo-cAMP treatment and is prevented by the protein kinase A (PKA) inhibitor KT5720 or by PKA depletion using siRNA. Taken together, these data identify the regulation of FSP27 as an important intermediate in the mechanism of lipolysis in adipocytes in response to TNF-α and isoproterenol.