SUMMARY
The endoplasmic reticulum (ER) protein Fat-Induced Transcript 2 (FIT2) has emerged as a key factor in lipid droplet (LD) formation, although its molecular function is unknown. Highlighting its importance, FIT2 orthologs are essential in worms and mice, and FIT2 deficiency causes a deafness/dystonia syndrome in humans. Here we show that FIT2 is a lipid phosphate phosphatase (LPP) enzyme that is required for maintaining the normal structure of the ER. Recombinant FIT2 exhibits LPP activity in vitro and loss of this activity in cells leads to ER membrane morphological changes and ER stress. Defects in LD formation in FIT2 depletion appear to be secondary to membrane lipid abnormalities, possibly due to alterations in phospholipids required for coating forming LDs. Our findings uncover an enzymatic role for FIT2 in ER lipid metabolism that is crucial for ER membrane homeostasis.