Liver fat accumulation precedes non-alcoholic steatohepatitis, an increasing cause of end-stage liver disease. Histone deacetylase 3 (HDAC3) is required for hepatic triglyceride homeostasis, and sterol regulatory element binding protein (SREBP) regulates the lipogenic response to feeding, but the crosstalk between these pathways is unknown. Here we show that inactivation of SREBP by hepatic deletion of SREBP cleavage activating protein (SCAP) abrogates the increase in lipogenesis caused by loss of HDAC3, but fatty acid oxidation remains defective. This combination leads to accumulation of lipid intermediates and to an energy drain that collectively cause oxidative stress, inflammation, liver damage, and, ultimately, synthetic lethality. Remarkably, this phenotype is prevented by ectopic expression of nuclear SREBP1c, revealing a surprising benefit of de novo lipogenesis and triglyceride synthesis in preventing lipotoxicity. These results demonstrate that HDAC3 and SCAP control symbiotic pathways of liver lipid metabolism that are critical for suppression of lipotoxicity.