The uncoupling protein 1 (UCP1) is highly expressed in brown adipose tissue, where it generates heat by uncoupling electron transport from ATP production. UCP1 is also found outside classical brown adipose tissue depots1–4, in adipocytes termed ‘brite’ (brown-in-white) or ‘beige’. In humans, the presence of ‘brite/beige’ adipocytes correlates with a lean, metabolically healthy phenotype5–8, but whether a causal relationship exists is not clear. Here we report that human ‘brite/beige’ adipocyte progenitors proliferate in response to pro-angiogenic factors, in association with expanding capillary networks. Adipocytes formed from these progenitors transform from being UCP1-negative to UCP1-positive in response to adenylate cyclase activation, a defining feature of the ‘beige/brite’ phenotype, and display uncoupled respiration. When implanted into normal or high fat diet-fed, glucose intolerant NOD-scid IL2rgnull mice, activated ‘brite/beige’ adipocytes enhance systemic glucose tolerance. These adipocytes express neuroendocrine and secreted factors, including the pro-protein convertase PCSK1, which is strongly associated with human obesity. Thus, pro-angiogenic conditions drive proliferation of human ‘beige/brite’ adipocyte progenitors, and activated ‘beige/brite’ adipocytes can affect systemic glucose homeostasis, potentially through a neuroendocrine mechanism.