Taurine is a conditionally essential micronutrient and one of the most abundant amino acids in humans1-3. In endogenous taurine metabolism, dedicated enzymes are involved in the biosynthesis of taurine from cysteine and in the downstream metabolism of secondary taurine metabolites4,5. One taurine metabolite is N-acetyltaurine6. Levels of N-acetyltaurine are dynamically regulated by stimuli that alter taurine or acetate flux, including endurance exercise7, dietary taurine supplementation8 and alcohol consumption6,9. So far, the identities of the enzymes involved in N-acetyltaurine metabolism, and the potential functions of N-acetyltaurine itself, have remained unknown. Here we show that the body mass index associated orphan enzyme phosphotriesterase-related (PTER)10 is a physiological N-acetyltaurine hydrolase. In vitro, PTER catalyses the hydrolysis of N-acetyltaurine to taurine and acetate. In mice, PTER is expressed in the kidney, liver and brainstem. Genetic ablation of Pter in mice results in complete loss of tissue N-acetyltaurine hydrolysis activity and a systemic increase in N-acetyltaurine levels. After stimuli that increase taurine levels, Pter knockout mice exhibit reduced food intake, resistance to diet-induced obesity and improved glucose homeostasis. Administration of N-acetyltaurine to obese wild-type mice also reduces food intake and body weight in a GFRAL-dependent manner. These data place PTER into a central enzymatic node of secondary taurine metabolism and uncover a role for PTER and N-acetyltaurine in body weight control and energy balance.