Selenium (Se) is an essential trace element used for biosynthesis of selenoproteins and is acquired either through diet or cellular recycling mechanisms. Selenocysteine lyase (Scly) is the enzyme that supplies Se for selenoprotein biosynthesis via decomposition of the amino acid selenocysteine (Sec). Knockout (KO) of Scly in a mouse affected hepatic glucose and lipid homeostasis. Mice lacking Scly and raised on an Se-adequate diet exhibit hyperinsulinemia, hyperleptinemia, glucose intolerance, and hepatic steatosis, with increased hepatic oxidative stress, but maintain selenoprotein levels and circulating Se status. Insulin challenge of Scly KO mice results in attenuated Akt phosphorylation but does not decrease phosphorylation levels of AMP kinase alpha (AMPK␣). Upon dietary Se restriction, Scly KO animals develop several characteristics of metabolic syndrome, such as obesity, fatty liver, and hypercholesterolemia, with aggravated hyperleptinemia, hyperinsulinemia, and glucose intolerance. Hepatic glutathione peroxidase 1 (GPx1) and selenoprotein S (SelS) production and circulating selenoprotein P (Sepp1) levels are significantly diminished. Scly disruption increases the levels of insulin-signaling inhibitor PTP1B. Our results suggest a dependence of glucose and lipid homeostasis on Scly activity. These findings connect Se and energy metabolism and demonstrate for the first time a unique physiological role of Scly in an animal model. S elenium (Se) is an essential trace element acquired through the diet that has been implicated in brain (53), immune, and thyroid function (49), in fertility (2), and in cancer prevention (43). Dietary Se is found in inorganic or organic forms. Se is mostly utilized for biosynthesis of the unique amino acid selenocysteine (Sec), which is cotranslationally incorporated into selenoproteins (36), functioning primarily in redox reactions. The Sec incorporation mechanism involves de novo synthesis of Sec via selenophosphate (SeϳP), which is synthesized by selenophosphate synthetases (SPS) (60). SeϳP is enzymatically attached to the O-phosphoseryl-tRNA, which is then converted to the specific selenocysteyl-tRNA [Ser]Sec used in the selenoprotein translation (54,61). Se is thought to enter the SeϳP pool for Sec biosynthesis either from diet or via recycling after selenoprotein degradation and release of Sec.Selenocysteine lyase (Scly) is responsible for cellular Sec decomposition to mobilize Se for utilization in selenoprotein synthesis (10, 41). Scly was first isolated and characterized from pig liver (18) and subsequently shown to break down Sec into alanine and selenide (41). Scly has been the target of several in vitro studies: it was reported to interact with SPS (58), and its crystal structure revealed the mechanism for the enzyme reaction specificity toward Se (10, 46). In vivo, Scly was recently shown to be involved in selenoprotein biosynthesis in HeLa cells (30). However, the physiological role of Scly in cellular Se metabolism and in vertebrate whole-body Se homeostasis remain...