Inexorable increases in insulin resistance, lipolysis, and hepatic glucose production (HGP) are hallmarks of type 2 diabetes. Previously, we showed that peripheral delivery of exogenous fibroblast growth factor 1 (FGF1) has robust anti-diabetic effects mediated by the adipose FGF receptor (FGFR) 1. However, its mechanism of action is not known. Here, we report that FGF1 acutely lowers HGP by suppressing adipose lipolysis. On a molecular level, FGF1 inhibits the cAMP-protein kinase A axis by activating phosphodiesterase 4D (PDE4D), which separates it mechanistically from the inhibitory actions of insulin via PDE3B. We identify Ser44 as an FGF1-induced regulatory phosphorylation site in PDE4D that is modulated by the feed-fast cycle. These findings establish the FGF1/PDE4 pathway as an alternate regulator of the adipose-HGP axis and identify FGF1 as an unrecognized regulator of fatty acid homeostasis.