Drosophila HNF4 (dHNF4) is the single ancestral ortholog of a highly conserved subfamily of nuclear receptors that includes two mammalian receptors, HNFalpha and HNFgamma, and 269 members in C. elegans. We show here that dHNF4 null mutant larvae are sensitive to starvation. Starved mutant larvae consume glycogen normally but retain lipids in their midgut and fat body and have increased levels of long-chain fatty acids, suggesting that they are unable to efficiently mobilize stored fat for energy. Microarray studies support this model, indicating reduced expression of genes that control lipid catabolism and beta-oxidation. A GAL4-dHNF4;UAS-lacZ ligand sensor can be activated by starvation or exogenous long-chain fatty acids, suggesting that dHNF4 is responsive to dietary signals. Taken together, our results support a feed-forward model for dHNF4, in which fatty acids released from triglycerides activate the receptor, inducing enzymes that drive fatty acid oxidation for energy production.