The CTP:phosphoethanolamine cytidylyltransferase gene (Pcyt2) regulates the synthesis of CDP-ethanolamine, which is combined with diacylglycerol (DAG) to form the membrane phospholipid phosphatidylethanolamine (PE) via the de novo Kennedy pathway. [¹⁴C]Ethanolamine and [³H]glycerol radiolabeling experiments established that PE synthesis and turnover are reduced in primary hepatocytes isolated from Pcyt2-deficient (Pcyt2+/⁻) mice relative to littermate controls. [³H]Glycerol radiolabeling revealed an increased formation of both DAG and triglyceride (TAG) and only increased turnover of DAG, consistent with elevated TAG accumulation. [³H]Acetate radiolabeling showed that de novo fatty acid (FA) synthesis also increased in Pcyt2-deficient hepatocytes. Overexpression of a Myc/His-tagged Pcyt2 complementary DNA into deficient hepatocytes increased Pcyt2 protein expression; normalized PE synthesis and turnover; and reduced FA, DAG, and TAG synthesis. Although increased Pcyt2-myc/His complementary DNA expression normalized lipid homeostasis, a Pcyt2 mutant with 60% catalytic activity (H244Y) was unable to normalize any of the parameters investigated. Only when PE synthesis was fully reestablished did the lipogenic gene expression and the formation of FA, DAG, and TAG revert to the levels of wild-type hepatocytes. These data unambiguously establish that the TAG accumulation present in Pcyt2-deficient hepatocytes is a direct consequence of Pcyt2 gene deficiency and reduced functioning of the de novo Kennedy pathway.