The Lyme disease spirochete Borrelia burgdorferi relies on uptake of essential nutrients from its host environments for survival and infection. Therefore, nutrient acquisition mechanisms constitute key virulence properties of the pathogen, yet these mechanisms remain largely unknown. In vivo expression technology applied to B. burgdorferi (BbIVET) during mammalian infection identified gene bb0562, which encodes a hypothetical protein comprised of a conserved domain of unknown function, DUF3996. DUF3996 is also found across adjacent encoded hypothetical proteins BB0563 and BB0564, suggesting the possibility that the three proteins could be functionally related. Deletion of bb0562, bb0563 and bb0564 individually and together demonstrated that bb0562 alone was important for optimal disseminated infection in immunocompetent and immunocompromised mice by needle inoculation and tick bite transmission. Moreover, bb0562 promoted spirochete survival during the blood dissemination phase of infection. Gene bb0562 was also found to be important for spirochete growth in low serum media and the growth defect of Δbb0562 B. burgdorferi was rescued with the addition of various long chain fatty acids, particularly oleic acid. In mammals, fatty acids are primarily stored in fat droplets in the form of triglycerides. Strikingly, addition of glyceryl trioleate, the triglyceride form of oleic acid, to the low serum media did not rescue the growth defect of the mutant, suggesting bb0562 may be important for the release of fatty acids from triglycerides. Therefore, we searched for and identified two canonical GXSXG lipase motifs within BB0562, despite the lack of homology to known bacterial lipases. Purified BB0562 demonstrated lipolytic activity dependent on the catalytic serine residues within the two motifs. In sum, we have established that bb0562 is a novel nutritional virulence determinant, encoding a lipase that contributes to fatty acid scavenge for spirochete survival in environments deficient in free fatty acids including the mammalian host.