Lipophagy is a subset of selective autophagy that specifically degrades lipid droplets and plays an important role in obesity. Leflunomide treatment in rheumatoid arthritis (RA) patients has been associated with weight loss and decreased blood glucose levels, which cannot be attributed to its known side effects. Our prior studies showed that A77 1726, the active metabolite of leflunomide, acts as an inhibitor of S6K1 to sensitize the insulin receptor and control hyperglycemia. Whether the anti-obesity effect of leflunomide is mediated by targeting S6K1 and its underlying mechanisms remain unclear. Here, we report that A77 1726 induced LC3 lipidation and increased the formation of autophagosomes and lipoautolysosomes in 3T3-L1 adipocytes by activating TGF-β-activated kinase 1 (TAK1), AMP-activated kinase (AMPK), and Unc-51 like autophagy-activated kinase 1 (ULK1). A77 1726 reduced the content of lipid droplets in 3T3-L1 adipocytes, which was blocked by bafilomycin or by beclin-1 knockdown. Similar observations were made in murine adipocytes differentiated from S6K1-/- embryonic fibroblasts (MEFs). Leflunomide treatment restricted bodyweight gains in ob/ob mice and reduced the visceral fat deposit and the size of adipocytes. Leflunomide treatment induced autophagy in adipose and liver tissues and reduced hepatic lipid contents. Consistently, S6K1 knockout increased the levels of LC3 lipidation in the liver, muscle, and fat of S6K-/- mice. Leflunomide treatment and S6K1 deficiency both induced TAK1, AMPK, and ULK1 phosphorylation in these tissues. These observations collectively suggest that leflunomide controls obesity in part by activating AMPK and inducing lipophagy. Our study provides insights into the mechanisms of leflunomide-mediated anti-obesity activity.