XBP1 is a key regulator of the unfolded protein response (UPR), which is involved in a wide range of physiological and pathological processes. XBP1 ablation in liver causes profound hypolipidemia in mice, highlighting its critical role in lipid metabolism. XBP1 deficiency triggers feedback activation of its upstream enzyme IRE1α, instigating regulated IRE1-dependent decay (RIDD) of cytosolic mRNAs. Here, we identify RIDD as a crucial control mechanism of lipid homeostasis. Suppression of RIDD by RNA interference or genetic ablation of IRE1α reversed hypolipidemia in XBP1-deficient mice. Comprehensive microarray analysis of XBP1 and/or IRE1α-deficient liver identified genes involved in lipogenesis and lipoprotein metabolism as RIDD substrates, which might contribute to the suppression of plasma lipid levels by activated IRE1α. Ablation of XBP1 ameliorated hepatosteatosis, liver damage, and hypercholesterolemia in dyslipidemic animal models, suggesting that direct targeting of either IRE1α or XBP1 might be a feasible strategy to treat dyslipidemias.