The insulin/IGF signaling pathway is a highly conserved regulator of metabolism in flies and mammals, regulating multiple physiological functions including lipid metabolism. Although insulin signaling is known to regulate the activity of a number of enzymes in metabolic pathways, a comprehensive understanding of how the insulin signaling pathway regulates metabolic pathways is still lacking. Accepted knowledge suggests the key regulated step in triglyceride (TAG) catabolism is the release of fatty acids from TAG via the action of lipases. We show here that an additional, important regulated step is the activation of fatty acids for beta-oxidation via Acyl Co-A synthetases (ACS). We identify pudgy as an ACS that is transcriptionally regulated by direct FOXO action in Drosophila. Increasing or reducing pudgy expression in vivo causes a decrease or increase in organismal TAG levels respectively, indicating that pudgy expression levels are important for proper lipid homeostasis. We show that multiple ACSs are also transcriptionally regulated by insulin signaling in mammalian cells. In sum, we identify fatty acid activation onto CoA as an important, regulated step in triglyceride catabolism, and we identify a mechanistic link through which insulin regulates lipid homeostasis.