A high-fat (HF) diet causes fatty liver, hyperlipidemia, and hypercholesterolemia, and cottonseed oil (CSO) has been shown to improve liver and plasma lipids in human and mouse models. The purpose of this study was to determine the effect of CSO versus olive oil (OO)-enriched diets on lipid levels in a HF diet model of fatty liver disease. We placed mice on a HF diet to induce obesity and fatty liver, after which mice were placed on CSO or OO diets, with chow and HF (5.1 Kcal/g) groups as control. When CSO and OO-fed mice were given isocaloric diets with the HF group, there were no differences in body weight, plasma, or hepatic lipids. However, when the CSO and OO diets were reduced in calories (4.0 Kcal/g), CSO and OO groups reduced body weight. The CSO group had lower plasma total cholesterol (-56%±6, p<0.01), free cholesterol (-53%±7, p<0.01), triglycerides (-61%±14, p<0.01), and LDL (-42%±16, p=0.01) vs. HF group whereas the OO diet lowered LDL (-18%±12, p=0.05) vs. HF. Furthermore, the CSO diet decreased hepatic total cholesterol (-40%±12, p<0.01), free cholesterol (-23%±11, p=0.04), and triglycerides (-47%±12, p=0.02). There were no significant changes in lipogenesis and fatty acid oxidation among groups. However, the CSO group increased lipid oxidative gene expression in liver and dihydrosterculic acid increased PPARα target genes with in vitro models. Taken together, consuming a reduced calorie diet enriched in CSO reduces liver and plasma lipid profiles in an obese model of fatty liver.