Short chain fatty acylations establish connections between cell metabolism and regulatory pathways. Lysine acetoacetylation (Kacac) was recently identified as a new histone mark. However, regulatory elements, substrate proteins, and epigenetic functions of Kacac remain unknown, hindering further in-depth understanding of acetoacetate modulated (patho)physiological processes. Here, we created a chemo-immunological approach for reliable detection of Kacac, and demonstrated that acetoacetate serves as the primary precursor for histone Kacac. We report the enzymatic addition of the Kacac mark by the acyltransferases GCN5, p300, and PCAF, and its removal by deacetylase HDAC3. Furthermore, we establish acetoacetyl-CoA synthetase (AACS) as a key regulator of cellular Kacac levels. A comprehensive proteomic analysis has identified 139 Kacac sites on 85 human proteins. Bioinformatics analysis of Kacac substrates and RNA-seq data reveal the broad impacts of Kacac on multifaceted cellular processes. These findings unveil pivotal regulatory mechanisms for the acetoacetate-mediated Kacac pathway, opening a new avenue for further investigation into ketone body functions in various pathophysiological states.