Fluid shortening is an important ingredient in the production of sponge cake. Peanut oil with 0, 43% and 85% of diacylglycerol content was used as the base oil. Different emulsifiers, such as glycerol monostearate, soy lecithin and sucrose ester, and their respective amounts, were investigated. It was found that the addition of emulsifiers had a positive effect on water-absorbing capacity, air-absorbing capacity and viscosity of the oils. Glycerol monostearate was the preferred emulsifier for fluid shortening with a recommended addition of 1.5%. The effects of different diacylglycerol content on fluid shortening and their impact on sponge cake production was also investigated. The onset oxidation temperature of the oil could be increased from 253.21 °C for PO-TAG-based fluid shortening to 263.70 °C for PO-DAG85-based fluid shortening. And the increase in diacylglycerol content leading to a lower specific gravity of the batter, which was 1.06 g/mL, 1.02 g/mL and 0.98 g/mL prepared by PO-DAG, PO-DAG43 and PO-DAG85 shortening, respectively. The results showed that diacylglycerols can be used as base oils in fluid shortening to improve the crystal network and stability of fluid shortenings, thereby reducing the specific gravity of the batter and improving the structural properties of the cake. This will extend the potential applications of diacylglycerols and increase the variety of base oils available for fluid shortening preparation.