Cellular retinol-binding protein (CRBP) type III (CRBP-III) belongs to the family of intracellular lipid-binding proteins, which includes the adipocyte-binding protein aP2. In the cytosol, CRBP-III binds retinol, the precursor of retinyl ester and the active metabolite retinoic acid. The goal of the present work is to understand the regulation of CRBP-III expression and its role in lipid metabolism. Using EMSAs, luciferase reporter assays, and chromatin immunoprecipitation assays, we found that CRBP-III is a direct target of peroxisome proliferator-activated receptor-gamma (PPARgamma). Moreover, CRBP-III expression was induced in adipose tissue of mice after treatment with the PPARgamma agonist rosiglitazone. To examine a potential role of CRBP-III in regulating lipid metabolism in vivo, CRBP-III-deficient (C-III-KO) mice were maintained on a high-fat diet (HFD). Hepatic steatosis was decreased in HFD-fed C-III-KO compared with HFD-fed wild-type mice. These differences were partly explained by decreased serum free fatty acid levels and decreased free fatty acid efflux from adipose tissue of C-III-KO mice. In addition, the lack of CRBP-III was associated with reduced food intake, increased respiratory energy ratio, and altered body composition, with decreased adiposity and increased lean body mass. Furthermore, expression of genes involved in mitochondrial fatty acid oxidation in brown adipose tissue was increased in C-III-KO mice, and C-III-KO mice were more cold tolerant than wild-type mice fed an HFD. In summary, we demonstrate that CRBP-III is a PPARgamma target gene and plays a role in lipid and whole body energy metabolism.