Identification of key regulators of energy homeostasis holds important therapeutic promise for metabolic disorders, such as obesity and diabetes. ACE2 cleaves angiotensin II (Ang II) to generate Ang-(1-7) which acts mainly through the Mas1 receptor. Here, we identify ACE2 pathway as a critical regulator in the maintenance of thermogenesis and energy expenditure. We found that ACE2 is highly expressed in brown adipose tissue (BAT) and that cold stimulation increases ACE2 and Ang-(1-7) levels in BAT and serum. Ace2 knockout mice (Ace2(-/y)) and Mas1 knockout mice (Mas1(-/-)) displayed impaired thermogenesis. Mice transplanted with brown adipose tissue from Mas1(-/-) display metabolic abnormalities consistent with those seen in the Ace2 and Mas1 knockout mice. In contrast, impaired thermogenesis of Lepr(db/db) obese diabetic mice and high-fat diet-induced obese mice were ameliorated by overexpression of Ace2 or continuous infusion of Ang-(1-7). Activation of ACE2 pathway was associated with improvement of metabolic parameters, including blood glucose, lipids, and energy expenditure in multiple animal models. Consistently, ACE2 pathway remarkably enhanced the browning of white adipose tissue. Mechanistically, we showed that ACE2 pathway activated Akt/FoxO1 and PKA pathway, leading to induction of UCP1 and activation of mitochondrial function. Our data propose that adaptive thermogenesis requires regulation of ACE2 pathway and highlight novel potential therapeutic targets for the treatment of metabolic disorders.