Dipeptides absorbed by the intestinal epithelium are delivered to circulation, but their metabolic roles are not yet clearly understood. We investigated the biological activities of a dietary dipeptide, H-Trp-Arg-OH (WR), on the regulation of peroxisome proliferator-activated receptor (PPAR) alpha activity. Reporter gene assays revealed that WR dose-dependently induced PPAR alpha transactivation. Surface plasmon resonance experiments demonstrated that WR interacts directly with the PPAR alpha ligand binding domain, and time-resolved fluorescence energy transfer analyses revealed recruitment of a co-activator peptide, fluorescein-PGC1 alpha, to PPAR alpha, confirming the direct binding of WR to PPAR alpha and occurrence of conformational changes. WR induced cellular fatty acid uptake and the expression of PPAR alpha response genes in fatty acid oxidation, thus reducing intracellular triglyceride accumulation in lipid-loaded hepatocytes. In conclusion, the dietary dipeptide WR activates PPAR alpha and reduces hepatic lipid accumulation in lipid-loaded hepatocytes.