Infiltration of arterial intima by foamy macrophages is a hallmark of early atherosclerotic lesions. Here, we investigated the potential role of Ser/Thr phosphatase PHLPP1 in foam cell development. PHLPP1 levels were elevated in OxLDL-exposed macrophages and high-fat diet (HFD)-fed zebrafish larvae. Using overexpression and knockdown approaches, we show that PHLPP1 promotes the accumulation of neutral lipids, and augments cellular total cholesterol and free fatty acid (FFA) levels. RNA-Seq analysis uncovered PHLPP1 role in lipid metabolism pathways. PHLPP1 interacted with and modestly increased ChREBP recruitment to Fasn promoter. PHLPP1-mediated lipid accumulation was attenuated by AMPK activation. Pharmacological inhibition or CRISPR/Cas9-mediated disruption of PHLPP1 resulted in lower lipid accumulation in the intersegmental vessels of HFD-fed zebrafish larvae along with a reduction in total cholesterol and triglyceride levels. Deficiency of phlp-2, C. elegans PHLPP1/2 ortholog, abolished lipid accumulation in high cholesterol-fed worms. We conclude that PHLPP1 exerts a significant effect on lipid buildup.