Deleterious mutations in the serine lipase DDHD2 are a causative basis of complex hereditary spastic paraplegia (HSP, subtype SPG54) in humans. We recently found that DDHD2 is a principal triglyceride hydrolase in the central nervous system (CNS) and that genetic deletion of this enzyme in mice leads to ectopic lipid droplet (LD) accumulation in neurons throughout the brain. Nonetheless, how HSP-related mutations in DDHD2 relate to triglyceride metabolism and LD formation remains poorly understood. Here, we have characterized a set of HSP-related mutations in DDHD2 and found that they disrupt triglyceride hydrolase activity in vitro and impair the capacity of DDHD2 to protect cells from LD accumulation following exposure to free fatty acid, an outcome that was also observed with a DDHD2-selective inhibitor. We furthermore isolated and characterized LDs from brain tissue of DDHD2^–/– mice, revealing that they contain both established LD-associated proteins identified previously in other organs and CNS-enriched proteins, including several proteins with genetic links to human neurological disease. These data, taken together, indicate that the genetic inactivation of DDHD2, as caused by HSP-associated mutations, substantially perturbs lipid homeostasis and the formation and content of LDs, underscoring the importance of triglyceride metabolism for normal CNS function and the key role that DDHD2 plays in this process.