Bile acid sequestrants (BASs) are cholesterol-lowering drugs that also affect hyperglycemia. The mechanism by which BASs exert these and other metabolic effects beyond cholesterol lowering remains poorly understood. The present study aimed to investigate the effects of a BAS, colestilan, on body weight, energy expenditure, and glucose and lipid metabolism and its mechanisms of action in high-fat-fed hyperlipidemic APOE*3 Leiden (E3L) transgenic mice. Mildly insulin-resistant E3L mice were fed a high-fat diet with or without 1.5% colestilan for 8 weeks. Colestilan treatment decreased body weight, visceral and subcutaneous fat, and plasma cholesterol and triglyceride levels but increased food intake. Blood glucose and plasma insulin levels were decreased, and hyperinsulinemic-euglycemic clamp analysis demonstrated improved insulin sensitivity, particularly in peripheral tissues. In addition, colestilan decreased energy expenditure and physical activity, whereas it increased the respiratory exchange ratio, indicating that colestilan induced carbohydrate catabolism. Moreover, kinetic analysis revealed that colestilan increased [(3)H]NEFA incorporation in biliary cholesterol and phospholipids and increased fecal lipid excretion. Gene expression analysis in liver, fat, and muscle supported the above findings. In summary, colestilan decreases weight gain and improves peripheral insulin sensitivity in high-fat-fed E3L mice by enhanced NEFA incorporation in biliary lipids and increased fecal lipid excretion.