Mutations in the gene encoding CGI-58/ABHD5 cause Chanarin-Dorfman Syndrome, characterized by excessive triacylglycerol storage in cells and tissues. CGI-58 has been identified as a co-activator of adipose triglyceride lipase (ATGL) and a lysophosphatidic acid acyltransferase (LPAAT). We developed a molecular model of CGI-58 structure, and then mutated predicted active site residues and performed LPAAT activity assays of recombinant wild-type and mutated CGI-58. When mutations of predicted catalytic residues failed to reduce LPAAT activity, we determined that LPAAT activity was due to a bacterial contaminant of affinity purification procedures, plsC, the sole LPAAT in E. coli. Purification protocols were optimized to reduce plsC contamination, in turn, reducing LPAAT activity. When CGI-58 was expressed in SM2-1(DE3) cells that lack plsC, lysates lacked LPAAT activity. Additionally, mouse CGI-58 expressed in bacteria as a GST-fusion protein and human CGI-58 expressed in yeast lacked LPAAT activity. Previously reported lipid binding activity of CGI-58 was revisited using protein-lipid overlays. Recombinant CGI-58 failed to bind lysophosphatidic acid, but interestingly, bound phosphatidylinositol 3-phosphate [PI(3)P] and phosphatidylinositol 5-phosphate [PI(5)P]. Pre-binding CGI-58 with [PI(3)P] or [PI(5)P] did not alter its co-activation of ATGL in vitro. In summary, purified recombinant CGI-58 that is functional as an ATGL co-activator lacks LPAAT activity.