Hypoxia in adipose tissue has been postulated as a possible contributor to obesity-related chronic inflammation, insulin resistance, and metabolic dysfunction. HIF1α (hypoxia-inducible factor 1α), a master signal mediator of hypoxia response, is elevated in obese adipose tissue. However, the role of HIF1α in obesity-related pathologies remains to be determined. Here we show that transgenic mice with adipose tissue-selective expression of a dominant negative version of HIF1α developed more severe obesity and were more susceptible to high fat diet-induced glucose intolerance and insulin resistance compared with their wild type littermates. Obesity in the transgenic mice was attributed to impaired energy expenditure and reduced thermogenesis. Histological examination of interscapular brown adipose tissue (BAT) in the transgenic mice demonstrated a markedly increased size of lipid droplets and decreased mitochondrial density in adipocytes, a phenotype similar to that in white adipose tissue. These changes in BAT of the transgenic mice were accompanied by decreased mitochondrial biogenesis and reduced expression of key thermogenic genes. In the transgenic mice, angiogenesis in BAT was decreased but was little affected in white adipose tissue. These findings support an indispensable role of HIF1α in maintaining the thermogenic functions of BAT, possibly through promoting angiogenesis and mitochondrial biogenesis in this tissue.