Brown fat differentiation in mice is fully achieved in fetuses at term and entails the acquisition of not only adipogenic but also thermogenic and oxidative mitochondrial capacities. The present study of the mice homozygous for a deletion in the gene for CCAAT/enhancer-binding protein alpha (C/EBPalpha-null mice) demonstrates that C/EBPalpha is essential for all of these processes. Developing brown fat from C/EBPalpha-null mice showed a lack of uncoupling protein-1 expression, impaired adipogenesis, and reduced size and number of mitochondria per cell when compared with wild-type mice. Furthermore, immature mitochondrial morphology was found in brown fat, but not in liver or heart, from C/EBPalpha-null mice. Concordantly, expression of both nuclear and mitochondrial genome-encoded genes for mitochondrial proteins was reduced in C/EBPalpha-null brown fat, although expression of mitochondrial rRNA and mitochondrial DNA content were unaltered. Expression of nuclear respiratory factor-2, thyroid hormone nuclear receptors, and peroxisome proliferator-activated receptor gamma coactivator-1, was delayed in C/EBPalpha-null brown fat. Iodothyronine 5'-deiodinase activity and thyroid hormone content were also reduced in brown fat from C/EBPalpha-null mice, indicating for the first time a crucial role for C/EBPalpha in controlling thyroid status in developing brown fat, which may contribute to impaired mitochondrial biogenesis and cell differentiation. When survival of C/EBPalpha-null mice was achieved by transgenically expressing C/EBPalpha only in the liver, a substantial recovery in brown fat differentiation was found by day 7 of postnatal age, which is associated with a compensatory overexpression of C/EBPdelta and C/EBPbeta.