The nuclear receptor, farnesoid X receptor (FXR/NR1H4), is increasingly recognized as a promising drug target for metabolic diseases, including nonalcoholic steatohepatitis (NASH). Protein-coding genes regulated by FXR are well known, but whether FXR also acts through regulation of long non-coding RNAs (lncRNAs), which vastly outnumber protein-coding genes, remains unknown. Utilizing RNA-seq and global run-on sequencing (GRO-seq) analyses in mouse liver, we found that FXR activation affects the expression of many RNA transcripts from chromatin regions bearing enhancer features. Among these we discovered a previously unannotated liver-enriched enhancer-derived lncRNA (eRNA), termed FXR-induced non-coding RNA (). We show that is specifically induced by the hammerhead-type FXR agonists, including GW4064 and tropifexor. CRISPR/Cas9-mediated liver-specific knockdown of in dietary NASH mice reduced the beneficial effects of tropifexor, an FXR agonist currently in clinical trials for NASH and primary biliary cholangitis (PBC), indicating that amelioration of liver fibrosis and inflammation in NASH treatment by tropifexor is mediated in part by . Overall, our findings highlight that pharmacological activation of FXR by hammerhead-type agonists induces a novel eRNA, , contributing to the amelioration of NASH in mice. may represent a new drug target for addressing metabolic disorders, including NASH.