The purpose of the current study was to determine the effect of the Artemisia capillaris ethyl acetate (ACE) fraction on diet-induced obesity and to elucidate the underlying mechanism. The ACE fraction treatment decreased the leptin level and fat accumulation in cultured 3T3-L1 adipocytes through the free fatty acids released in the medium. The ACE fraction significantly suppressed the expression of peroxisome proliferator-activated receptor-$gamma$ in cultured 3T3-L1 adipocytes. To determine the effect of the ACE fraction on C57BL/6J male mice, the mice were separated into six groups: normal control (N), N plus 0.1 g/kg body weight ACE (NB), high fat control group (HF), HF plus 0.05 g/kg of body weight ACE (HFA), HF plus 0.1 g/kg of body weight ACE (HFB), and HF plus 0.03 g/kg of body weight rosiglitazone (RG) groups. We speculate that the HFB group exhibits a lipid-lowering effect via increased mitochondrial $eta$-oxidation, of which the rate-limiting enzyme is carnitine palmitoyl transferase I, the activity of which was significantly increased. Also, the activity of fatty acid synthase, a key enzyme of fatty acid synthesis, was markedly suppressed (19%) in the HFB group, as compared to the HF group, and glycerol-3-phosphate dehydrogenase activity, which is very useful in studying adipogenic differentiation in vitro, was markedly suppressed (30%) in the HFB group compared with the HF group. Furthermore, the HFB group showed lowered hepatic lipid droplet accumulation and adipose tissue weight and size. We suggest that 0.1 g of the ACE fraction/kg of body weight may exert an antiobesity effect in C57BL/6J mice by enhancing lipid metabolism.