The carbohydrate response element binding protein (ChREBP) is a glucose-responsive transcription factor that plays a critical role in converting excess carbohydrate to storage fat in liver. In response to changing glucose levels, ChREBP activity is regulated by nucleo-cytoplasmic shuttling of ChREBP via interactions with 14-3-3 proteins and importins. The nuclear/ cytosol trafficking is regulated partly by phosphorylation/dephosphorylation of serine-196 mediated by cAMP-dependent protein kinase and protein phosphatase. We show here that protein-free extracts of starved and high fat-fed livers contain metabolites that activate interaction of ChREBP/14-3-3 and inhibit ChREBP-importin α interaction, resulting in cytosolic localization. These metabolites were identified as β-hydroxybutyrate (βHB) and acetoacetate (AcAc). Nuclear localization of GFP-ChREBP is rapidly inhibited in hepatocytes incubated in βHB or fatty acids, and the observed inhibition is closely correlated with the production of ketone bodies. These observations show that ketone bodies play an important role in regulation of ChREBP activity by restricting ChREBP localization to the cytoplasm, thus inhibiting fat synthesis during periods of ketosis.