Jumonji D3 (JMJD3) histone demethylase epigenetically regulates development and differentiation, immunity, and tumorigenesis by demethylating a gene repression histone mark, H3K27-me3, but a role for JMJD3 in metabolic regulation has not been described. SIRT1 deacetylase maintains energy balance during fasting by directly activating both hepatic gluconeogenic and mitochondrial fatty acid β-oxidation genes, but the underlying epigenetic and gene-specific mechanisms remain unclear. In this study, JMJD3 was identified unexpectedly as a gene-specific transcriptional partner of SIRT1 and epigenetically activated mitochondrial β-oxidation, but not gluconeogenic, genes during fasting. Mechanistically, JMJD3, together with SIRT1 and the nuclear receptor PPARα, formed a positive autoregulatory loop upon fasting-activated PKA signaling and epigenetically activated β-oxidation–promoting genes, including Fgf21, Cpt1a, and Mcad. Liver-specific downregulation of JMJD3 resulted in intrinsic defects in β-oxidation, which contributed to hepatosteatosis as well as glucose and insulin intolerance. Remarkably, the lipid-lowering effects by JMJD3 or SIRT1 in diet-induced obese mice were mutually interdependent. JMJD3 histone demethylase may serve as an epigenetic drug target for obesity, hepatosteatosis, and type 2 diabetes that allows selective lowering of lipid levels without increasing glucose levels.