Feeding of rapeseed (canola) oil with a high erucic acid concentration is known to cause hepatic steatosis in animals. Mitochondrial fatty acid oxidation plays a central role in liver lipid homeostasis, so it is possible that hepatic metabolism of erucic acid might decrease mitochondrial fatty acid oxidation. However, the precise mechanistic relationship between erucic acid levels and mitochondrial fatty acid oxidation is unclear. Using male Sprague–Dawley rats, along with biochemical and molecular biology approaches, we report here that peroxisomal β-oxidation of erucic acid stimulates malonyl-CoA formation in the liver and thereby suppresses mitochondrial fatty acid oxidation. Excessive hepatic uptake and peroxisomal β-oxidation of erucic acid resulted in appreciable peroxisomal release of free acetate, which was then used in the synthesis of cytosolic acetyl-CoA. Peroxisomal metabolism of erucic acid also remarkably increased the cytosolic NADH:NAD+ ratio, suppressed sirtuin 1 (SIRT1) activity, and thereby activated acetyl-CoA carboxylase, which stimulated malonyl-CoA biosynthesis from acetyl-CoA. Chronic feeding of a diet including high-erucic-acid rapeseed oil diminished mitochondrial fatty acid oxidation and caused hepatic steatosis and insulin resistance in the rats. Of note, administration of a specific peroxisomal β-oxidation inhibitor attenuated these effects. Our findings establish a cross-talk between peroxisomal and mitochondrial fatty acid oxidation. They suggest that peroxisomal oxidation of long-chain fatty acids suppresses mitochondrial fatty acid oxidation by stimulating malonyl-CoA formation, which might play a role in fatty acid–induced hepatic steatosis and related metabolic disorders.