The transcriptional coactivator PGC-1 is induced in the liver in response to fasting and coordinates the activation of targets necessary for increasing energy production for gluconeogenesis and ketogenesis. Following partial hepatectomy, the liver must restore its mass while maintaining metabolic homeostasis in order to ensure survival. Here we report that PGC-1 is rapidly and dramatically induced posthepatectomy, with an amplitude of induction that exceeds the fasting response. Maximal activation of PGC-1 posthepatectomy is dependent on the bZIP transcription factor, C/EBP, a critical factor in hepatocyte proliferation. We demonstrate in vivo C/EBP binding to C/EBP and CRE sites in the PGC-1 promoter and show that the C/EBP site is essential for PGC-1 activation. Expression of the PGC-1 target, Cpt1a, the rate-limiting enzyme in fatty acid -oxidation, and of LCAD, an enzyme involved in -oxidation of long chain fatty acids, was significantly reduced in C/EBP^-/- livers posthepatectomy. These findings identify C/EBP as a direct activator of PGC-1 in the regenerating liver. The demonstration of a functional link between C/EBP for PGC-1 activation provides a likely mechanism for how upstream signaling pathways in the regenerating liver can enable the adaptation to the changed metabolic status.