The thermogenic activity of brown adipose tissue (BAT) and browning of white adipose tissue are important components of energy expenditure. Here we show that GPR120, a receptor for polyunsaturated fatty acids, promotes brown fat activation. Using RNA-seq to analyse mouse BAT transcriptome, we find that the gene encoding GPR120 is induced by thermogenic activation. We further show that GPR120 activation induces BAT activity and promotes the browning of white fat in mice, whereas GRP120-null mice show impaired cold-induced browning. Omega-3 polyunsaturated fatty acids induce brown and beige adipocyte differentiation and thermogenic activation, and these effects require GPR120. GPR120 activation induces the release of fibroblast growth factor-21 (FGF21) by brown and beige adipocytes, and increases blood FGF21 levels. The effects of GPR120 activation on BAT activation and browning are impaired in FGF21-null mice and cells. Thus, the lipid sensor GPR120 activates brown fat via a mechanism that involves induction of FGF21.