Promoting brown adipose tissue (BAT) formation and function may reduce obesity. Recent data link retinoids to energy balance, but a specific role for retinoid metabolism in white versus brown fat is unknown. Retinaldehyde dehydrogenases (Aldhs), also known as aldehyde dehydrogenases, are rate-limiting enzymes that convert retinaldehyde (Rald) to retinoic acid. Here we show that Aldh1a1 is expressed predominately in white adipose tissue (WAT), including visceral depots in mice and humans. Deficiency of the Aldh1a1 gene induced a BAT-like transcriptional program in WAT that drove uncoupled respiration and adaptive thermogenesis. WAT-selective Aldh1a1 knockdown conferred this BAT program in obese mice, limiting weight gain and improving glucose homeostasis. Rald induced uncoupling protein-1 (Ucp1) mRNA and protein levels in white adipocytes by selectively activating the retinoic acid receptor (RAR), recruiting the coactivator PGC-1α and inducing Ucp1 promoter activity. These data establish Aldh1a1 and its substrate Rald as previously unrecognized determinants of adipocyte plasticity and adaptive thermogenesis, which may have potential therapeutic implications.