Peptide YY (PYY) is best known for its important role in appetite regulation, but recent pharmacological studies have suggested that PYY is also involved in regulating energy balance and glucose homeostasis. However, the mechanism behind the regulation of these parameters by PYY is less clear. Here, by utilising an inducible transgenic mouse model where PYY overexpression is induced in adult animals (PYYtg) and release of mature PYY peptides is controlled by endogenous machineries, we show that elevating PYY levels leads to reduced food intake after a 24-h fast. Furthermore, PYYtg mice, although not significantly different from WT with respect to body weight, adiposity, lean mass, physical activity or energy expenditure, exhibited a significantly increased respiratory exchange ratio (RER), indicating decreased lipid oxidation and/or increased lipogenesis. Importantly, PYYtg mice showed a 25% reduction in liver protein levels of phosphorylated acetyl-CoA carboxylase (pACC) in the absence of changes in total ACC levels compared to those of WT mice. Moreover, liver protein levels of AMP-activated kinase (AMPK) in PYYtg mice were 25% lower than those of WT mice, consistent with a reduced pACC in these mice. These data suggest that elevation of PYY levels as seen after a meal can increase lipogenic capacity, which is likely a key contributor to the increased RER seen in PYYtg mice. In addition, PYYtg mice exhibited comparable insulin tolerance and oral glucose tolerance to those of WT, but showed a trend towards decreased insulin levels in response to an oral glucose challenge, indicating that PYY could improve insulin action. Taken together, these findings demonstrate that under physiological conditions, PYY reduces food intake while enhancing lipogenic capacity and insulin action, likely contributing to fuel assimilation in the postprandial state.