Significance Brown adipose tissue (BAT) burns fat to maintain body temperature through thermogenesis in mammals. Because heat production requires metabolizing large amounts of calories, increasing the activity of the tissue could treat obesity and related metabolic disorders. Recently, thioesterase superfamily member 1 (Them1) was identified to suppress thermogenesis, whereas deletion of Them1 enhanced the ability of BAT to burn fat and prevented diet-induced obesity. In this study, we show Them1 contains a lipid sensor that binds to fatty acids and lysophosphatidylcholine, which inversely regulate the activity of Them1. This lipid sensor allows for allosteric control of Them1 activity to regulate the burning of fat. Additionally, this study affirms a promising drug target to treat obesity and related disorders.