Activation of retinoic acid receptor (RAR) with all-trans-retinoic acid (RA) ameliorates glucose intolerance and insulin resistance in obese mice. The recently discovered fibroblast growth factor 21 (FGF21) is a hepatocyte-derived hormone that restores glucose and lipid homeostasis in obesity-induced diabetes. However, whether hepatic RAR is linked to FGF21 in the control of lipid metabolism and energy homeostasis remains elusive. Here we identify FGF21 as a direct target gene of RARβ. The gene transcription of Fgf21 is increased by the RAR agonist RA and by overexpression of RARα and RARβ, but it is unaffected by RARγ in HepG2 cells. Promoter deletion analysis characterizes a putative RA-responsive element (RARE) primarily located in the 5'-flanking region of the Fgf21 gene. Disruption of the RARE sequence abolishes RA responsiveness. In vivo adenoviral overexpression of RARβ in the liver enhances production and secretion of FGF21, which in turn promotes hepatic fatty acid oxidation and ketogenesis and ultimately leads to increased energy expenditure in mice. The metabolic effects of RA or RARβ are mimicked by FGF21 overexpression and largely abolished by FGF21 knockdown. Moreover, hepatic RARβ is bound to the putative RAREs of the Fgf21 promoter in a fasting-inducible manner in vivo, which contributes to FGF21 induction and the metabolic adaptation to prolonged fasting. In addition to other nuclear receptors, such as peroxisome proliferator-activated receptor α and retinoic acid receptor-related receptor α, RAR may act as a novel component to induce hepatic FGF21 in the regulation of lipid metabolism. The hepatic RAR-FGF21 pathway may represent a potential drug target for treating metabolic disorders.