Mg2+ is an abundant intracellular cation and an important co‐factor in the machineries that replicate, transcribe and translate genomic information. Like Ca2+, Mg2+ is also compartmentalized to mitochondria, which are known to accumulate and release Mg2+ in response to metabolic stimuli and thus regulate the intracellular Mg2+ (iMg2+) levels. Mrs2, is the only known molecular machinery associated with mitochondrial Mg2+(mMg2+)influx. Though the core component of the mMg2+ influx is defined, our understanding of how mMg2+ homeostasis alters iMg2+ and the metabolic state of the cell remains incomplete. To begin elucidating the importance of mMg2+, we made a liver‐specific Mrs2 knockout mouse (KO) using the Cre‐loxP system. Liver being the central hub of lipid metabolism, we asked whether loss of mMg2+ alters hepatic lipid homeostasis. Our results show Mrs2 KO mice to accumulate intrahepatic lipid. To understand the molecular mechanism of the altered lipid accumulation, we performed a global proteome analysis in ad libitum fed state liver. We observed PPARα‐regulated targets to be differentially upregulated in Mrs2 KO. Our results show that in Mrs2 KO, Mg2+‐activated binding of AMPK/PPARα co‐activates PPARα to increase target gene expression. PPARα activation is known to increase the maximal fatty acid oxidization (FAO) in the liver but it is intriguing to observe intrahepatic lipid accumulation in Mrs2 KO. To understand this unusual relationship, we measured acetyl coA (AcCOA). In line with increased expression of FAO proteins, we observed AcCOA levels to be increased in Mrs2 KO. Since under homeostatic conditions, FAO derived AcCOA can be channeled to ketogenesis (Fig. 1 left panel), we anticipated robust ketogenesis in Mrs2 KO. Our results show no change in circulating ketone bodies (KB) in Mrs2 KO, however, revealing a state of ketogenic insufficiency. Additionally, our results show that in the setting of ketogenic insufficiency (Fig. 1 middle panel), the FAO‐derived AcCOA is exported to the cytoplasm as citrate. We also show the increased cytosolic citrate levels to positively correlate with increased de novo lipogenesis (DNL) via cataplerosis, resulting in excessive accumulation of diacyl glycerols (DAG) and triacyl glycerols (TAG). Though evidence exists on the regulation of lipid metabolism by Mg2+, the underlying molecular mechanism by which Mg2+ regulates lipid metabolism is an unanswered question for decades. Results from our study is the first of its kind to uncover new pathways through which Mg2+ regulates hepatic lipid metabolism. Future directions: Since increased DNL can trigger hepatic insulin resistance (IR) via DAG‐mediated activation of PKCε, for our future study we hypothesize Mrs2 KO to be insulin resistant in the extreme circumstance of ketogenic insufficiency and a high‐fat load (Fig. 1 right panel). We anticipate FAO‐derived acetyl‐CoA to sequester Coenzyme A and disrupt the tricarboxylic acid (TCA) cycle, resulting in excessive DNL, DAG/TAG accumulation, and hepatic IR through PKCε activation, thus iterating a triad relationship of mMg2+ homeostasis, hepatic lipid metabolism, and IR.