Dysregulation of fatty acid oxidation plays a pivotal role in the pathophysiology of obesity and insulin resistance. Medium- and short-chain-3-hydroxyacyl-coenzyme A (CoA) dehydrogenase (SCHAD) (gene name, hadh) catalyze the third reaction of the mitochondrial β-oxidation cascade, the oxidation of 3-hydroxyacyl-CoA to 3-ketoacyl-CoA, for medium- and short-chain fatty acids. We identified hadh as a putative obesity gene by comparison of two genome-wide scans, a quantitative trait locus analysis previously performed in the polygenic obese New Zealand obese mouse and an earlier described small interfering RNA-mediated mutagenesis in Caenorhabditis elegans. In the present study, we show that mice lacking SCHAD (hadh−/−) displayed a lower body weight and a reduced fat mass in comparison with hadh+/+ mice under high-fat diet conditions, presumably due to an impaired fuel efficiency, the loss of acylcarnitines via the urine, and increased body temperature. Food intake, total energy expenditure, and locomotor activity were not altered in knockout mice. Hadh−/− mice exhibited normal fat tolerance at 20 C. However, during cold exposure, knockout mice were unable to clear triglycerides from the plasma and to maintain their normal body temperature, indicating that SCHAD plays an important role in adaptive thermogenesis. Blood glucose concentrations in the fasted and postprandial state were significantly lower in hadh−/− mice, whereas insulin levels were elevated. Accordingly, insulin secretion in response to glucose and glucose plus palmitate was elevated in isolated islets of knockout mice. Therefore, our data indicate that SCHAD is involved in thermogenesis, in the maintenance of body weight, and in the regulation of nutrient-stimulated insulin secretion.