Lipins are the founding members of a novel family of Mg(2+)-dependent phosphatidate phosphatases (PAP1 enzymes) that play key roles in fat metabolism and lipid biosynthesis. Despite their importance, there is still little information on how their activity is regulated. Here we demonstrate that the functions of lipin 1 and 2 are evolutionarily conserved from unicellular eukaryotes to mammals. The two lipins display distinct intracellular localization in HeLa M cells, with a pool of lipin 2 exhibiting a tight membrane association. Small interfering RNA-mediated silencing of lipin 1 leads to a dramatic decrease of the cellular PAP1 activity in HeLa M cells, whereas silencing of lipin 2 leads to an increase of lipin 1 levels and PAP1 activity. Consistent with their distinct functions in HeLa M cells, lipin 1 and 2 exhibit reciprocal patterns of protein expression in differentiating 3T3-L1 adipocytes. Lipin 2 levels increase in lipin 1-depleted 3T3-L1 cells without rescuing the adipogenic defects, whereas depletion of lipin 2 does not inhibit adipogenesis. Finally, we show that the PAP1 activity of both lipins is inhibited by phosphorylation during mitosis, leading to a decrease in the cellular PAP1 activity during cell division. We propose that distinct and non-redundant functions of lipin 1 and 2 regulate lipid production during the cell cycle and adipocyte differentiation.