Adipose triacylglycerol lipase (ATGL) and hormone-sensitive lipase (HSL) are essential for efficient lipolysis in adipose tissue and skeletal muscle. Herein, we utilized whole body knockout mice to address the importance of ATGL and HSL for metabolic function and exercise performance. ATGL deletion severely disrupts whole-body substrate partitioning at rest; reducing plasma free fatty acid (FFA) availability (WT: 0.49 +/- 0.06 vs. ATGL(-/-) 0.34 +/- 0.03 mM), which in turn enhances carbohydrate oxidation during fasting (mean RER, WT: 0.86 +/- 0.02, ATGL(-/-) 0.90 +/- 0.01) and is associated with depleted muscle and liver glycogen stores. While plasma FFA was modestly reduced (23%) and whole body carbohydrate metabolism increased in HSL(-/-) mice, resting glycogen storage was not compromised. Studies in isolated muscles revealed that the capacity of ATGL and HSL(-/-) muscle to transport exogenous fatty acids is not compromised and the capacity to oxidize fatty acids is actually increased (3.7- and 1.3-fold above WT for ATGL and HSL). The exercise-induced increase in plasma FFA and glycerol was blunted with ATGL or HSL deletion, demonstrating an impaired capacity for exercise-induced lipolysis in these mice. Carbohydrate oxidation was increased concomitantly during exercise in ATGL(-/-) and HSL(-/-) mice, resulting in more muscle and liver glycogen depletion. Maximal running velocity and endurance capacity were reduced by 42% and 46% in ATGL(-/-) mice, but not in HSL(-/-) mice. The reduction in performance in ATGL(-/-) mice was not due to defective muscle contractile performance. These results demonstrate an essential role for both ATGL and HSL in maintaining adequate FFA supply to sustain normal substrate metabolism at rest and during exercise.