Protein arginine methyltransferase (PRMT) 1 is involved in the regulation of various metabolic pathways such as glucose metabolism in liver and atrophy in the skeletal muscle. However, the role of PRMT1 in the fat tissues under the disease state has not been elucidated to date. In this study, we delineate the function of this protein in adipocytes in vivo. PRMT1 expression was abundant in the white adipose tissues (WAT), which was induced upon a high-fat diet in mice and by obesity in humans. We found that adipocyte-specific depletion of Prmt1 resulted in decreased fat mass without overall changes in body weight in mice. Mechanistically, the depletion of Prmt1 in WAT led to the activation of the AMPK pathway, which was causal to the increased lipophagy, mitochondrial lipid catabolism, and the resultant reduction in lipid droplet size in WAT in vivo. Interestingly, despite the increased energy expenditure, we observed a promotion of adipose tissue inflammation and an ectopic accumulation of triglycerides in the peripheral tissues in Prmt1 adipocyte-specific knockout mice, which promoted the impaired insulin tolerance that is reminiscent of mouse models of lipodystrophy. These data collectively suggest that PRMT1 prevents WAT from excessive degradation of triglycerides by limiting AMPK-mediated lipid catabolism to control whole-body metabolic homeostasis in diet-induced obesity conditions.