Nonalcoholic steatohepatitis (NASH) is a common feature of the metabolic syndrome and toxic reactions to pharmacological drugs. Tamoxifen, (TMX) a widely used anti-breast cancer drug, can induce NASH and changes in plasma cholesterol levels through mechanisms that are unclear. We studied primary actions of TMX using a short-term treatment (5 days) that induces microvesicular hepatic steatosis and marked hypercholesterolemia in male rats. Using a combined approach of gene expression profiling and NMR-based metabolite analysis, we found that TMX-treated livers have increased saturated fatty acid content despite changes in gene expression, indicating decreased de novo lipogenesis and increased fatty acid oxidation. Our results show that TMX predominantly down-regulates FAS expression and activity as indicated by the accumulation of malonyl-CoA, a known inhibitor of mitochondrial beta-oxidation. In the face of a continued supply of exogenous free fatty acids, the blockade of fatty acid oxidation produced by elevated malonyl-CoA is likely to be the major factor leading to steatosis. Use of a combination of metabolomic and transcriptomic analysis has allowed us to identify mechanisms underlying important metabolic side effects of a widely prescribed drug. Given the broader importance of hepatic steatosis, the novel molecular mechanism revealed in this study should be examined in other forms of steatosis and nonalcoholic steatohepatitis.