We have previously identified lipocalin 2 (Lcn2) as a cytokine playing a critical role in the regulation of body fat mass, lipid metabolism, and insulin resistance. Lcn2 deficiency reduces PPARγ gene expression in adipocytes. In this study, we investigated the role of Lcn2 in PPARγ activation and function via assessing the insulin sensitization and fatty acid (FA) homeostasis of PPARγ agonist in high-fat diet (HFD)-induced obesity in Lcn2(-/-) mice. We found that rosiglitazone (Rosi) significantly improved insulin sensitivity in Lcn2(-/-) mice as effectively as in wild-type (WT) mice; unfed-state levels of blood glucose, free FAs, and triglycerides (TGs) were significantly reduced after a 25-d treatment of Rosi in Lcn2(-/-) mice. However, Rosi action on fat deposition and FA homeostasis was altered; Rosi-induced body weight and subcutaneous fat gain and liver lipid accumulation were markedly lessened in Lcn2(-/-) mice. The results of in vivo metabolic labeling showed that Rosi markedly reduced de novo lipogenesis in adipose tissue of Lcn2(-/-) mice. In brown adipose tissue (BAT), the expression of the genes functioning in TG hydrolysis and mitochondrial oxidation was up-regulated more in Lcn2(-/-) than in WT mice. Most strikingly, Rosi stimulated significantly higher levels of uncoupling protein-1 expression in BAT, and completely rescued cold intolerance in Lcn2(-/-) mice. We demonstrate that Lcn2 is a critical selective modulator of PPARγ activation and function in lipid homeostasis and energy expenditure.