Selective autophagy ensures the removal of specific soluble proteins, protein aggregates, damaged mitochondria, and invasive bacteria from cells. Defective autophagy has been directly linked to metabolic disorders. However how selective autophagy regulates metabolism remains largely uncharacterized. Here we show that a deficiency in selective autophagy is associated with suppression of lipid oxidation. Hepatic loss of Atg7 or Atg5 significantly impairs the production of ketone bodies upon fasting, due to decreased expression of enzymes involved in β-oxidation following suppression of transactivation by PPARα. Mechanistically, nuclear receptor co-repressor 1 (NCoR1), which interacts with PPARα to suppress its transactivation, binds to the autophagosomal GABARAP family proteins and is degraded by autophagy. Consequently, loss of autophagy causes accumulation of NCoR1, suppressing PPARα activity and resulting in impaired lipid oxidation. These results suggest that autophagy contributes to PPARα activation upon fasting by promoting degradation of NCoR1 and thus regulates β-oxidation and ketone bodies production.