Plasma membrane (PM) free cholesterol (FC) is emerging as an important modulator of signal transduction. Here, we show that hepatocyte-specific knockout (HSKO) of the cellular FC exporter, ATP binding cassette transporter A1 (ABCA1), leads to decreased PM FC content and defective trafficking of lysosomal FC to the PM. Chow-fed HSKO mice had reduced hepatic: 1) insulin-stimulated Akt phosphorylation, 2) activation of the lipogenic transcription factor Sterol Regulatory Element Binding Protein (SREBP)-1c, and 3) lipogenic gene expression, versus controls. Consequently, Western-type diet-fed HSKO mice were protected from steatosis. Surprisingly, HSKO mice had intact glucose metabolism; they showed normal gluconeogenic gene suppression in response to re-feeding and normal glucose and insulin tolerance. We conclude that: 1) ABCA1 maintains optimal hepatocyte PM FC, through intracellular FC trafficking, for efficient insulin signaling; and 2) hepatocyte ABCA1 deletion produces a form of selective insulin resistance, such that lipogenesis is suppressed but glucose metabolism remains normal.