Dynamic metabolic changes occur in the liver during the transition between fasting and feeding. Here we show that transient ER stress responses in the liver following feeding terminated by Sdf2l1 are essential for normal glucose and lipid homeostasis. Sdf2l1 regulates ERAD through interaction with a trafficking protein, TMED10. Suppression of Sdf2l1 expression in the liver results in insulin resistance and increases triglyceride content with sustained ER stress. In obese and diabetic mice, Sdf2l1 is downregulated due to decreased levels of nuclear XBP-1s, whereas restoration of Sdf2l1 expression ameliorates glucose intolerance and fatty liver with decreased ER stress. In diabetic patients, insufficient induction of Sdf2l1 correlates with progression of insulin resistance and steatohepatitis. Therefore, failure to build an ER stress response in the liver may be a causal factor in obesity-related diabetes and nonalcoholic steatohepatitis, for which Sdf2l1 could serve as a therapeutic target and sensitive biomarker.