Retrieval-to-ER protein (Rer1p) functions as a cargo receptor at the intermediate compartment/cis-Golgi to retrieve ER-escaped transmembrane proteins via retrograde COPI vesicles. In this study we are using Drosophila as a tractable genetic system to explore the broader physiological roles of dRer1p in vivo. Knock out of dRer1 strongly reduced fat bodies and herein dramatically enlarged lipid droplets. At the ultrastructural level, the nuclear envelope is distorted with the appearance of membrane bubbles. Given its role in Golgi-to-ER transport, we hypothesize that Rer1p may regulate the ER localization of critical enzymes involved in lipid metabolism. Several lipid metabolism enzymes were found to interact with Rer1 in mammalian cell lines, and two of the initiation enzymes for LD formation, GPAT3 and GPAT4, were induced to localize on LD in Rer1KO cells, which provide a starting point to explore the molecular mechanism of Rer1 in regulating lipid metabolism.