Liver carnitine palmitoyltransferase I catalyzes the transfer of long-chain fatty acids into mitochondria. L-CPT I is considered the rate-controlling enzyme in fatty acid oxidation. Expression of the L-CPT I gene is induced by starvation in response to glucagon secretion from the pancreas, an effect mediated by cAMP. Here, the molecular mechanisms underlying the induction of L-CPT I gene expression by cAMP were characterized. We demonstrate that the cAMP response unit of the L-CPT I gene is composed of a cAMP-response element motif and a DR1 sequence located 3 kb upstream of the transcription start site. Our data strongly suggest that the coactivator PGC-1 is involved in the regulation of this gene expression by cAMP in combination with HNF4 alpha and cAMP-response element-binding protein (CREB). Indeed, (i) cotransfection of CREB or HNF4 alpha dominant negative mutants completely abolishes the effect of cAMP on the L-CPT I promoter, and (ii) the cAMP-responsive unit binds HNF4 alpha and CREB through the DR1 and the cAMP-response element sequences, respectively. Moreover, cotransfection of PGC-1 strongly activates the L-CPT I promoter through HNF4 alpha bound at the DR1 element. Finally, we show that the transcriptional induction of the PGC-1 gene by glucagon through cAMP in hepatocytes precedes that of L-CPT-1. In addition to the key role that PGC-1 plays in glucose homeostasis, it may also be critical for lipid homeostasis. Taken together these observations suggest that PGC-1 acts to coordinate the process of metabolic adaptation in the liver.