Triacylglycerol (TG) and steryl ester (SE) lipid storage is a universal strategy to maintain organismal energy and membrane homeostasis. Cycles of building and mobilizing storage fat are fundamental in (re)distributing lipid substrates between tissues or to progress ontogenetic transitions. In this study, we show that Hormone-sensitive lipase (Hsl) specifically controls SE mobilization to initiate intergenerational sterol transfer in Drosophila melanogaster. Tissue-autonomous Hsl functions in the maternal fat body and germline coordinately prevent adult SE overstorage and maximize sterol allocation to embryos. While Hsl-deficiency is largely dispensable for normal development on sterol-rich diets, animals depend on adipocyte Hsl for optimal fecundity when dietary sterol becomes limiting. Notably, accumulation of SE but not of TG is a characteristic of Hsl-deficient cells across phyla including murine white adipocytes. In summary, we identified Hsl as an ancestral regulator of SE degradation, which improves intergenerational sterol transfer and reproductive success in flies.