FXR agonists are used to treat non-alcoholic fatty liver disease (NAFLD), in part because they reduce hepatic lipids. Here, we show that FXR activation with the FXR agonist GSK2324 controls hepatic lipids via reduced absorption and selective decreases in fatty acid synthesis. Using comprehensive lipidomic analyses, we show that FXR activation in mice or humans specifically reduces hepatic levels of mono- and polyunsaturated fatty acids (MUFA and PUFA). Decreases in MUFA are due to FXR-dependent repression of Scd1, Dgat2, and Lpin1 expression, which is independent of SHP and SREBP1c. FXR-dependent decreases in PUFAs are mediated by decreases in lipid absorption. Replenishing bile acids in the diet prevented decreased lipid absorption in GSK2324-treated mice, suggesting that FXR reduces absorption via decreased bile acids. We used tissue-specific FXR KO mice to show that hepatic FXR controls lipogenic genes, whereas intestinal FXR controls lipid absorption. Together, our studies establish two distinct pathways by which FXR regulates hepatic lipids.