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) α activity. Reporter gene assays revealed that WR dose-dependently induced PPARα transactivation. Surface plasmon resonance experiments demonstrated that WR interacts directly with the PPARα ligand binding domain, and time-resolved fluorescence energy transfer analyses revealed recruitment of a co-activator peptide, fluorescein-PGC1α, to PPARα, confirming the direct binding of WR to PPARα and occurrence of conformational changes. WR induced cellular fatty acid uptake and the expression of PPARα response genes in fatty acid oxidation, thus reducing intracellular triglyceride accumulation in lipid-loaded hepatocytes. In conclusion, the dietary dipeptide WR activates PPARα and reduces hepatic lipid accumulation in lipid-loaded hepatocytes.