ABCD2 (D2) is a peroxisomal ATP binding cassette (ABC) transporter that is expressed in brain, adrenal and liver. D2 is transcriptionally regulated by key transcriptional factors that control lipid and glucose metabolism. Therefore, we examined its role in adipose tissue. These studies revealed that D2 is highly abundant in adipose tissue and upregulated during adipogenesis. However, D2 deficiency does not affect either adipogenesis or lipid accumulation. An examination of the lipid profile of adipose tissue revealed the accumulation of C20 and C22 fatty acids in D2 deficient (D2‐/‐) mice. When challenged with a diet enriched in erucic acid (C22:1, 10% kcal), this lipid accumulated in both liver and adipose tissue. Following 8 weeks of diet, D2‐/‐ mice showed increased adiposity, glucose intolerance, dyslipidemia and steatosis. Analysis of the hepatic lipid profile showed significant changes away from poly unsaturated fatty acids (PUFAs) and toward C18‐22 mono‐unsaturated fatty acids (MUFA). RT‐PCR of the mRNA from the adipose tissue and liver revealed significant changes in lipogenic (ACC, SCD1 & 2) and PUFA synthesis (Δ5 & 6‐desaturase) genes in D2‐/‐ mice. The molecular mechanisms by which D2 regulates lipid metabolism in adipose tissue remains unclear. To explore potential mechanisms, the subcellular localization of D2 in adipose tissue was determined. Our results demonstrated that D2 resides in a distinct subclass of peroxisomes that does not containing classical peroxisomal markers such as pex19 or PMP70, but are positive for pex14. In conclusion, our studies reveal a novel role of D2 and peroxisomes in the protection from disruptions of lipid metabolism induced by dietary erucic acid and that D2 resides in a unique compartment within adipocytes that plays a yet to be elucidated role in the regulation of lipid metabolism.