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7 year oldThe Energy Independence Executive Order suspends more than half a dozen measures enacted by the president's predecessor, and boosts fossil fuels.
Among the initiatives now rescinded is the Clean Power Plan, which required states to slash carbon emissions.
Business groups have praised the Trump administration's move but environmental campaigners have condemned it.
Before he signed the order, the president said this would put an end to the "war on coal" and "job-killing regulations".
During the campaign, he vowed to pull the US out of the Paris climate dealagreed in December 2015.
The White House said the new measures would "help keep energy and electricity affordable, reliable and clean in order to boost economic growth and job creation".
But environmental groups warn that they will have serious consequences at home and abroad.
President Trump takes a very different approach to the environment from Mr Obama. The former president argued that climate change was "real and cannot be ignored".
The Clean Power Plan sought to limit greenhouse gas emissions at coal-fired power plants to meet US commitments under the Paris accord.
The regulation has been unpopular in Republican-run states, where it has been subject to legal challenges - especially from businesses that rely on burning oil, coal and gas.
Last year the Supreme Court temporarily halted the plan, while the challenges are heard.
The Trump administration says that scrapping the plan will put people to work and reduce America's reliance on imported fuel.
It says the president will be "moving forward on energy production in the US".
"The previous administration devalued workers with their policies. We can protect the environment while providing people with work."
During the president's maiden visit to the Environmental Protection Agency, he signed the Energy Independence Executive Order, which cuts EPA regulations in order to support Mr Trump's plan of cutting the agency's budget by a third.
He recently appointed climate change sceptic Scott Pruitt as its new head.
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Matt McGrath, BBC environment correspondent
This order signed by President Trump is both a practical and a philosophical attempt to change the US narrative on climate change.
His supporters say it will create thousands of jobs in the liberated oil and gas industries. His opponents agree the new order will be a job creator - but they'll be jobs for lawyers, not in the coal fields.
Front and centre is practical action on the Clean Power Plan (CPP), the Obama project to cut fossil fuels from energy production. Although it has long been tied up in the courts, the new administration will leave it to fester there while they come up with a much weaker replacement.
There will also be new, less restrictive rules on methane emissions from the oil and industry and more freedom to sell coal leases from federal lands.
President Trump is signalling a significant change in the widely held philosophy that CO2 is the enemy, the main driver of climate change.
US environmentalists are aghast but also enraged. They will be queuing up to go to court. But in many ways that's playing into the hands of President Trump and the fossil fuel lobby.
"Delay is what they want," one green source told me, "delay is winning."
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