The orphan nuclear receptor small heterodimer partner (SHP) regulates metabolic pathways involved in hepatic bile acid production and both lipid and glucose homeostasis via the transcriptional repression of other nuclear receptors. In the present study, we generated fat-specific SHP-overexpressed transgenic (TG) mice and determined the potential role of SHP activation, specifically in adipocytes, in the regulation of adipose tissue function in response to stressors. We determined in 2 mo-old SHP TG mice body weight, fat mass index, adipose tissues morphology, thermogenic and metabolic gene expression, metabolic rates at baseline and in response to beta adrenergic receptor agonists, and brown fat ultrastructural changes in response to cold exposure (6-48 h). Mice were fed a 10-wk high-fat diet (HFD; 42% fat). Weight gain, fat mass index, adipose tissues morphology, glucose tolerance, and metabolic rates were determined at the end of the feeding. Young TG mice had increased body weight and adiposity; however, their energy metabolism was increased and brown fat function was enhanced in response to cold exposure through the activation of thermogenic genes and mitochondrial biogenesis. SHP overexpression exacerbated the diet-induced obesity phenotype as evidence by marked weight gain over time, increased adiposity, and severe glucose intolerance compared with wild-type mice fed a HFD. In addition, SHP-TG mice fed HFD had decreased diet-induced adaptive thermogenesis, increased food intake, and decreased physical activity. In conclusion, SHP activation in adipocytes strongly affects weight gain and diet-induced obesity. Developing a synthetic compound to antagonize the effect of SHP may prove to be useful in treating obesity.