Obesity is often associated with dyslipidemia, insulin resistance, and hypertension. Together, these metabolic perturbations greatly increase the risk of developing cardiovascular disease and diabetes. Although fish oil is a well-established hypolipidemic agent, the mechanisms by which it mediates its lipid-lowering effects are not clear. In addition, it has not been established whether dietary fish oil has different effects in lean and obese mice. LDL receptor deficient (LDLR-/-) and leptin deficient mice on a LDLR-/- background (ob/ob;LDLR-/-) were fed a high fat diet (39% total fat) supplemented with 6% olive oil or fish oil for 6 wk. Fish oil supplementation resulted in lower concentrations of plasma total cholesterol (P < 0.01), triglycerides (P < 0.01), and free fatty acids (P < 0.001) in lean LDLR-/- mice, but not in ob/ob;LDLR-/- mice. In contrast, a fish oil diet did not modulate insulin sensitivity in lean LDLR-/- mice, but it improved insulin sensitivity in ob/ob;LDLR-/- mice (P < 0.05) compared with olive oil fed ob/ob;LDLR-/- mice. Interestingly, plasma adiponectin concentrations were significantly higher and hepatic steatosis was reduced in both mouse models upon fish oil feeding. Finally, fish oil fed LDLR-/- mice exhibited higher hepatic AMP activated protein kinase (AMPK) phosphorylation (P < 0.05), whereas AMPK phosphorylation was not elevated by fish oil feeding in ob/ob;LDLR-/- mice. Taken together, our data suggest that fish oil reduces hepatic steatosis in both lean and obese mice, has potent plasma lipid lowering effects in lean mice, and exerts insulin sensitizing effects in obese mice.