The liver is responsible for key metabolic functions, including control of normal homoeostasis in response to diet and xenobiotic metabolism/detoxification. We have shown previously that inactivation of the hepatic cytochrome P450 system through conditional deletion of POR (P450 oxidoreductase) induces hepatic steatosis, liver growth and P450 expression. We have exploited a new conditional model of POR deletion to investigate the mechanism underlying these changes. We demonstrate that P450 induction, liver growth and hepatic triacylglycerol (triglyceride) homoeostasis are intimately linked and provide evidence that the observed phenotypes result from hepatic accumulation of unsaturated fatty acids, which mediate these phenotypes by activation of the nuclear receptor CAR (constitutive androstane receptor) and, to a lesser degree, PXR (pregnane X receptor). To our knowledge this is the first direct evidence that P450s play a major role in controlling unsaturated fatty acid homoeostasis via CAR. The regulation of P450s involved in xenobiotic metabolism by this mechanism has potentially significant implications for individual responses to drugs and environmental chemicals.