The hepatic glucose fasting response is gaining traction as a therapeutic pathway to enhance hepatic and whole-host metabolism. However, the mechanisms underlying these metabolic effects remain unclear. Here, we demonstrate the epidermal-type lipoxygenase, eLOX3 (encoded by its gene, Aloxe3), is a potentially novel effector of the therapeutic fasting response. We show that Aloxe3 is activated during fasting, glucose withdrawal, or trehalose/trehalose analogue treatment. Hepatocyte-specific Aloxe3 expression reduced weight gain and hepatic steatosis in diet-induced and genetically obese (db/db) mouse models. Aloxe3 expression, moreover, enhanced basal thermogenesis and abrogated insulin resistance in db/db diabetic mice. Targeted metabolomics demonstrated accumulation of the PPARγ ligand 12-KETE in hepatocytes overexpressing Aloxe3. Strikingly, PPARγ inhibition reversed hepatic Aloxe3–mediated insulin sensitization, suppression of hepatocellular ATP production and oxygen consumption, and gene induction of PPARγ coactivator-1α (PGC1α) expression. Moreover, hepatocyte-specific PPARγ deletion reversed the therapeutic effect of hepatic Aloxe3 expression on diet-induced insulin intolerance. Aloxe3 is, therefore, a potentially novel effector of the hepatocellular fasting response that leverages both PPARγ-mediated and pleiotropic effects to augment hepatic and whole-host metabolism, and it is, thus, a promising target to ameliorate metabolic disease.