Lipolysis is a delicate process involving complex signaling cascades and sequential enzymatic activations. In Caenorhabditis elegans, fasting induces various physiological changes, including a dramatic decrease in lipid contents through lipolysis. Interestingly, C. elegans lacks perilipin family genes which play a crucial role in the regulation of lipid homeostasis in other species. Here, we demonstrate that in the intestinal cells of C. elegans, a newly identified protein, lipid droplet protein 1 (C25A1.12; LID-1), modulates lipolysis by binding to adipose triglyceride lipase 1 (C05D11.7; ATGL-1) during nutritional deprivation. In fasted worms, lipid droplets were decreased in intestinal cells, whereas suppression of ATGL-1 via RNA interference (RNAi) resulted in retention of stored lipid droplets. Overexpression of ATGL-1 markedly decreased lipid droplets, whereas depletion of LID-1 via RNAi prevented the effect of overexpressed ATGL-1 on lipolysis. In adult worms, short-term fasting increased cyclic AMP (cAMP) levels, which activated protein kinase A (PKA) to stimulate lipolysis via ATGL-1 and LID-1. Moreover, ATGL-1 protein stability and LID-1 binding were augmented by PKA activation, eventually leading to increased lipolysis. These data suggest the importance of the concerted action of lipase and lipid droplet protein in the response to fasting signals via PKA to maintain lipid homeostasis.