Adequate lipid secretion by mammary glands during lactation is essential for the survival of mammalian offspring. However, the mechanism governing this process is poorly understood. Here we show that Cidea is expressed at high levels in lactating mammary glands and its deficiency leads to premature pup death as a result of severely reduced milk lipids. Furthermore, the expression of xanthine oxidoreductase (XOR), an essential factor for milk lipid secretion, is markedly lower in Cidea-deficient mammary glands. Conversely, ectopic Cidea expression induces the expression of XOR and enhances lipid secretion in vivo. Unexpectedly, as Cidea has heretofore been thought of as a cytoplasmic protein, we detected it in the nucleus and found it to physically interact with transcription factor CCAAT/enhancer-binding protein β (C/EBPβ) in mammary epithelial cells. We also observed that Cidea induces XOR expression by promoting the association of C/EBPβ onto, and the dissociation of HDAC1 from, the promoter of the Xdh gene encoding XOR. Finally, we found that Fsp27, another CIDE family protein, is detected in the nucleus and interacts with C/EBPβ to regulate expression of a subset of C/EBPβ downstream genes in adipocytes. Thus, Cidea acts as a previously unknown transcriptional coactivator of C/EBPβ in mammary glands to control lipid secretion and pup survival.