Cellular lipid metabolism is regulated in part by protein-protein interactions near the surface of intracellular lipid droplets. This work investigated functional interactions between Abhd5, a protein activator of the lipase Atgl, and Mldp, a lipid droplet scaffold protein that is highly expressed in oxidative tissues. Abhd5 was highly targeted to individual lipid droplets containing Mldp in microdissected cardiac muscle fibers. Mldp bound Abhd5 in transfected fibroblasts and directed it to lipid droplets in proportion to Mldp concentration. Analysis of protein-protein interactions in situ demonstrated that the interaction of Abhd5 and Mldp occurs mainly, if not exclusively, on the surface of lipid droplets. Oleic acid treatment rapidly increased the interaction between Abhd5 and Mldp, and this effect was suppressed by pharmacological inhibition of triglyceride synthesis. The functional role of the Abhd5-Mldp interaction was explored using a mutant of mouse Abhd5 (E262K) that has greatly reduced binding to Mldp. Mldp promoted the subcellular colocalization and interaction of Atgl with wild type, but not mutant, Abhd5. This differential interaction was reflected in cellular assays of Atgl activity. In the absence of Mldp, wild type and mutant Abhd5 were equally effective in reducing lipid droplet formation. In contrast, mutant Abhd5 was unable to prevent lipid droplet accumulation in cells expressing Mldp despite considerable targeting of Atgl to lipid droplets containing Mldp. These results indicate that the interaction between Abhd5 and Mldp is dynamic and essential for regulating the activity of Atgl at lipid droplets containing Mldp.Growing evidence indicates that lipogenesis and lipolysis are regulated by protein-protein interactions that occur on the surface of specialized intracellular lipid droplets (1, 2). PAT 3 (perilipin, adipophilin, and TIP-47) proteins, are thought to be key regulators of these processes by serving as scaffolds that organize and regulate the protein trafficking at lipid droplet surfaces (1-3). Mldp (muscle lipid droplet protein; alternatively, OXPAT, LSDP5) is a PAT family member that is highly expressed in tissues, like muscle and liver, having high oxidative capacity (4 -6). Expression of Mldp is up-regulated under conditions such as fasting and diabetes, in which the systemic supply of lipid to target tissues is increased, and in vitro studies suggest that Mldp plays a role in facilitating triglyceride storage as well as fatty acid oxidation (4 -6). It is not presently known how Mldp is involved in these functions, but we hypothesize that it is likely to involve direct or indirect interactions with lipases and lipase co-activators (3, 7). Abhd5 (␣/ hydrolase domain-containing protein 5; alternatively CGI-58) is an evolutionarily conserved protein that acts as a potent activator of Atgl (adipose triglyceride lipase; alternatively, PNPLA2, desnutrin, TTS-2.1) (8). Both proteins are expressed in a variety of tissues, and rare homozygous mutations of either gene in humans produces a...