Excessive expansion of adipose tissue in obesity typically leads to overflow and accumulation of lipids in other tissues, causing fatty liver disease and atherosclerosis. The intracellular protein, phosphoprotein enriched in astrocytes (PEA)-15 has been linked to metabolic disease but its role in lipid storage has not been examined. To delineate the role of PEA-15 in adipose tissue, we placed PEA-15-/- mice on a high fat diet. These mice developed increased body weight and greater white adipose tissue expansion compared to high fat diet-fed wild type mice. This was due to increased adipocyte cell size in PEA-15-/- mice consistent with greater lipid storage capacity. Surprisingly, PEA-15-/- mice exhibited improvements in whole body insulin sensitivity, lower hepatic weight and decreased serum triglycerides indicating a protective phenotype. To determine effects on atherosclerosis, PEA-15-/- mice were crossed with the ApoE-/- mice on a high fat diet. Strikingly, these mice were protected from atherosclerosis and had less hepatic lipid accumulation despite increased adiposity. Therefore, we reveal for the first time that PEA-15 plays a novel role in regulating the expansion of adipose tissue. Decreasing PEA-15 expression increases the sequestering of lipids in adipose tissue, protecting other tissues in obesity, thereby improving metabolic health.