The upsurge in prevalence of obesity has spawned an epidemic of nonalcoholic fatty liver disease (NAFLD). Previously, we identified a sequence variant (I148M) in patatin-like phospholipase domain-containing protein 3 (PNPLA3) that confers susceptibility to both hepatic triglyceride (TG) deposition and liver injury. To glean insights into the biological role of PNPLA3, we examined the molecular mechanisms by which nutrient status controls hepatic expression of PNPLA3. PNPLA3 mRNA levels, which were low in fasting animals, increased ∼90-fold with carbohydrate feeding. The increase was mimicked by treatment with a liver X receptor (LXR) agonist and required the transcription factor SREBP-1c. The site of SREBP-1c binding was mapped to intron 1 of Pnpla3 using chromatin immunoprecipitation and electrophoretic mobility shift assays. SREBP-1c also promotes fatty acid synthesis by activating several genes encoding enzymes in the biosynthetic pathway. Addition of fatty acids (C16:0, C18:1, and C18:2) to the medium of cultured hepatocytes (HuH-7) increased PNPLA3 protein mass without altering mRNA levels. The posttranslational increase in PNPLA3 levels persisted after blocking TG synthesis with triascin C. Oleate (400 μM) treatment prolonged the half-life of PNPLA3 from 2.4 to 6.7 h. These findings are consistent with nutritional control of PNPLA3 being effected by a feed-forward loop; SREBP-1c promotes accumulation of PNPLA3 directly by activating Pnpla3 transcription and indirectly by inhibiting PNPLA3 degradation through the stimulation of fatty acid synthesis.