AGPATs (1-acylglycerol-3-phosphate O-acyltransferases) catalyze the acylation of lysophosphatidic acid to form phosphatidic acid (PA), a key step in the glycerol-3-phosphate pathway for the synthesis of phospholipids and triacylglycerols. AGPAT2 is the only AGPAT isoform whose loss-of-function mutations cause a severe form of human congenital generalized lipodystrophy. Paradoxically, AGPAT2 deficiency is known to dramatically increase the level of its product, PA. Here, we find that AGPAT2 deficiency impairs the biogenesis and growth of lipid droplets. We show that AGPAT2 deficiency compromises the stability of CDP-diacylglycerol (DAG) synthases (CDSs) and decreases CDS activity in both cell lines and mouse liver. Moreover, AGPAT2 and CDS1/2 can directly interact and form functional complexes, which promote the metabolism of PA along the CDP-DAG pathway of phospholipid synthesis. Our results provide key insights into the regulation of metabolic flux during lipid synthesis and suggest substrate channelling at a major branch point of the glycerol-3-phosphate pathway.