Cellular retinol-binding protein, 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 electromobility shift assays, luciferase reporter assays, and chromatin immunoprecipitation assays we found that CRBP-III is a direct target of PPAR. Moreover, CRBP-III expression was induced in adipose tissue of mice following treatment with the PPAR agonist rosiglitazone. To examine a potential role of CRBP-III in regulating lipid metabolism in vivo, mice deficient of CRBP-III (C-III-KO) were maintained on a high fat diet (HFD). C-III-KO mice fed a HFD have decreased hepatic steatosis compared to wild-type mice fed a HFD. These differences were partly explained by decreased serum free fatty acid levels and decreased free fatty acid efflux from the adipose tissue of C-III-KO mice. In addition the lack of CRBP-III was associated with reduced food intake, an increased respiratory energy ratio and an altered body composition with decreased adiposity and increased lean body mass. Furthermore, C-III-KO mice had increased expression of genes involved in mitochondrial fatty acid oxidation in brown adipose tissue and were more cold tolerant compared to wild-type mice fed a HFD. In summary, we demonstrate that CRBP-III is a PPAR target gene and plays a role in lipid metabolism and whole-body energy metabolism.