Peroxisome proliferator-activated receptor gamma (PPARγ) is a key regulator of brown adipocyte differentiation and thermogenesis. The PPARγ gene produces two isoforms, PPARγ1 and PPARγ2. PPARγ2 is identical to PPARγ1 except for additional 30 amino acids present in the N-terminus of PPARγ2. Here we report that the C-terminally truncated form of PPARγ2 is predominantly present in the mitochondrial matrix of brown adipocytes and that it binds to the D-loop region of mitochondrial DNA (mtDNA), which contains the promoter for mitochondrial electron transport chain (ETC) genes. Expression of mitochondrially targeted MLS-PPARγ2 in brown adipocytes increases mtDNA-encoded ETC gene expression concomitant with enhanced mitochondrial respiration. These results suggest that direct regulation of mitochondrially encoded ETC gene expression by mitochondrial PPARγ2, in part, underlies the isoform-specific role for PPARγ2 in brown adipocytes.