Mutations in peroxin (PEX) genes lead to loss of peroxisomes, resulting in the formation of peroxisomal biogenesis disorders (PBDs) and early lethality. Studying PBDs and their animal models has greatly contributed to our current knowledge about peroxisomal functions. Very-long-chain fatty acid (VLCFA) accumulation has long been suggested as a major disease-mediating factor, although the exact pathological consequences are unclear. Here, we show that a Drosophila Pex19 mutant is lethal due to a deficit in medium-chain fatty acids (MCFAs). Increased lipolysis mediated by Lipase 3 (Lip3) leads to accumulation of free fatty acids and lipotoxicity. Administration of MCFAs prevents lipolysis and decreases the free fatty acid load. This drastically increases the survival rate of Pex19 mutants without reducing VLCFA accumulation. We identified a mediator of MCFA-induced lipolysis repression, the ceramide synthase Schlank, which reacts to MCFA supplementation by increasing its repressive action on lip3. This shifts our understanding of the key defects in peroxisome-deficient cells away from elevated VLCFA levels toward elevated lipolysis and shows that loss of this important organelle can be compensated by a dietary adjustment.