Lipid metabolism is essential for growth and generates much of the energy needed during periods of starvation. In Drosophila, fasting larvae release large quantities of lipid from the fat body but it is unclear how and where this is processed. Here we identify the oenocyte as the principal cell type accumulating lipid droplets during starvation. Tissue-specific manipulations of the Slimfast amino-acid channel, the Lsd2 fat-storage regulator and the Brummer lipase indicate that oenocytes act downstream of the fat body. In turn, oenocytes are required for depleting stored lipid from the fat body during fasting. Hence, lipid-metabolic coupling between the fat body and oenocytes is bidirectional. When food is plentiful, oenocytes have critical roles in regulating growth, development and feeding behaviour. In addition, they specifically express many different lipid-metabolizing proteins, including Cyp4g1, an omega-hydroxylase regulating triacylglycerol composition. These findings provide evidence that some lipid-processing functions of the mammalian liver are performed in insects by oenocytes.