Brown adipose has the potential to counteract obesity, and thus, identifying signaling pathways that regulate the activity of this tissue is of great clinical interest. PRDM16 is a transcription factor that activates brown fat‐specific genes while repressing white fat and muscle‐specific genes in adipocytes. Whether PRDM16 also controls other gene programs to regulate adipocyte function was unclear. Here, we identify a novel role for PRDM16 in suppressing type I interferon (IFN)‐stimulated genes (ISGs), including Stat1, in adipocytes in vitro and in vivo. Ectopic activation of type I IFN signaling in brown adipocytes induces mitochondrial dysfunction and reduces uncoupling protein 1 (UCP1) expression. Prdm16‐deficient adipose displays an exaggerated response to type I IFN, including higher STAT1 levels and reduced mitochondrial gene expression. Mechanistically, PRDM16 represses ISGs through binding to promoter regions of these genes and blocking the activating function of IFN regulatory factor 1 (IRF1). Together, these data indicate that PRDM16 diminishes responsiveness to type I IFN in adipose cells to promote thermogenic and mitochondrial function.