Mice lacking the Jak tyrosine kinase member Tyk2 become progressively obese due to aberrant development of Myf5+ brown adipose tissue (BAT). Tyk2 RNA levels in BAT and skeletal muscle, which shares a common progenitor with BAT, are dramatically decreased in mice placed on a high-fat diet and in obese humans. Expression of Tyk2 or the constitutively active form of the transcription factor Stat3 (CAStat3) restores differentiation in Tyk2(-/-) brown preadipocytes. Furthermore, Tyk2(-/-) mice expressing CAStat3 transgene in BAT also show improved BAT development, normal levels of insulin, and significantly lower body weights. Stat3 binds to PRDM16, a master regulator of BAT differentiation, and enhances the stability of PRDM16 protein. These results define Tyk2 and Stat3 as critical determinants of brown fat lineage and suggest that altered levels of Tyk2 are associated with obesity in both rodents and humans.