The transcriptional coactivator peroxisome-proliferator-activated receptor-gamma coactivator-1alpha (PGC-1alpha) is induced in the liver in response to fasting and coordinates the activation of targets necessary for increasing energy production for gluconeogenesis and ketogenesis. After partial hepatectomy, the liver must restore its mass while maintaining metabolic homeostasis to ensure survival. Here we report that PGC-1alpha is rapidly and dramatically induced after hepatectomy, with an amplitude of induction that exceeds the fasting response. Maximal activation of PGC-1alpha after hepatectomy is dependent on the basic leucine zipper transcription factor, CCAAT/enhancer binding protein-beta (C/EBPbeta), a critical factor in hepatocyte proliferation. We demonstrate in vivo C/EBPbeta binding to C/EBP and cAMP response element sites in the PGC-1alpha promoter and show that the C/EBP site is essential for PGC-1alpha activation. Expression of the PGC-1alpha target, carnitine palmitoyl transferase 1a, the rate-limiting enzyme in fatty acid beta-oxidation, and of long-chain acyl-coenzyme A dehydrogenase, an enzyme involved in beta-oxidation of long chain fatty acids, was significantly reduced in C/EBPbeta(-/-) livers after hepatectomy. These findings identify C/EBPbeta as a direct activator of PGC-1alpha in the regenerating liver. The demonstration of a functional link between C/EBPbeta and PGC-1alpha activation provides a likely mechanism for how upstream signaling pathways in the regenerating liver can enable the adaptation to the changed metabolic status.