Although both inflammatory and metabolic complications occur during sepsis and endotoxemia, relatively few studies have examined the molecular mechanism underlying LPS-modulated metabolic changes during sepsis. In this report, we have demonstrated that LPS suppresses free fatty acid (FFA) oxidation, and consequently contributes to elevated plasma levels of FFA and triglyceride (TG). Furthermore, this process depends upon the interleukin-1 receptor associated kinase 1 (IRAK-1), one of the key TLR4 intracellular signaling kinases. IRAK-1^−/− mice fail to exhibit the dramatic rise in plasma FFA and TG levels compared to wild-type (WT) mice following lethal LPS injection. Mechanistically, we demonstrated that LPS suppresses FFA oxidation through decreasing the expression levels of key FFA oxidative genes including CPT-1 and MCAD in both liver and kidney tissues of WT but not IRAK-1^−/− mice. The expression of CPT-1 and MCAD is controlled by nuclear receptors and co-receptors including PPARα and PGC-1α. We observed that LPS selectively suppresses the levels of PPARα and PGC-1α in tissues from WT, but not IRAK-1^−/− mice. Consequently, IRAK-1^−/− mice have a higher survival rate following a lethal dose of LPS. Our current study reveals a novel role for IRAK-1 in the metabolic alterations induced by LPS.