Although growth differentiation factor-5 (GDF5) has been implicated in skeletal development and joint morphogenesis in mammals, little is known about its functionality in adipogenesis and energy homeostasis. Here, we show a critical role of GDF5 in regulating brown adipogenesis for systemic energy expenditure in mice. GDF5 expression was preferentially upregulated in brown adipose tissues from inborn and acquired obesity mice. Transgenic overexpression of GDF5 in adipose tissues led to a lean phenotype and reduced susceptibility to diet-induced obesity through increased systemic energy expenditure. Overexpression of GDF5 facilitated the development of brown fat-like cells, called brite or beige cells, along with the expression of uncoupling protein-1 in inguinal subcutaneous white adipose tissue. In mutant mice harboring the dominant-negative GDF5, marked impairment in energy expenditure and thermogenesis was seen under obesogenic conditions. Recombinant GDF5 promoted brown adipogenesis through the mothers against decapentaplegic homolog (Smad) and peroxisome proliferator–activated receptor-γ coactivator-1α (PGC-1α) pathways after activation of bone morphogenetic protein receptor (BMPR). These results suggest that brown adipogenesis and energy homeostasis are both positively regulated by the GDF5/BMPR/Smad/PGC-1α signaling pathway in adipose tissues. Modulation of these pathways might be an effective therapeutic strategy for obesity and type 2 diabetes.