Catecholamines stimulate the first step of lipolysis by PKA-dependent release of the lipid droplet-associated protein ABHD5 from perilipin to co-activate the lipase ATGL. Here, we unmask a yet unrecognized proteolytic and cardioprotective function of ABHD5. ABHD5 acts in vivo and in vitro as a serine protease cleaving HDAC4. Through the production of an N-terminal polypeptide of HDAC4 (HDAC4-NT), ABHD5 inhibits MEF2-dependent gene expression and thereby controls glucose handling. ABHD5-deficiency leads to neutral lipid storage disease in mice. Cardiac-specific gene therapy of HDAC4-NT does not protect from intra-cardiomyocyte lipid accumulation but strikingly from heart failure, thereby challenging the concept of lipotoxicity-induced heart failure. ABHD5 levels are reduced in failing human hearts and murine transgenic ABHD5 expression protects from pressure-overload induced heart failure. These findings represent a conceptual advance by connecting lipid with glucose metabolism through HDAC4 proteolysis and enable new translational approaches to treat cardiometabolic disease.