Caloric restriction causes a homeostatic reduction in thermogenesis. We aimed to determine whether exercise could counteract this. We studied four groups of normal-weight ewes ( n = 5), including control sedentary fed ad libitum, exercise fed ad libitum (30 min/d, 5 d/wk), diet-restricted (70% of ad libitum food intake), and combined diet and exercise. Temperature probes implanted in sternal and retroperitoneal adipose tissue and skeletal muscle measured thermogenesis. After the 4-wk intervention, hypothalami were collected for in situ hybridization, and fat and muscle biopsies were collected for real-time PCR and Western blotting. Combined diet and exercise reduced adiposity ( P < 0.05). Caloric restriction alone reduced overnight temperatures in sternal and retroperitoneal fat ( P < 0.05), which was counteracted by exercise ( P < 0.05). Exercise did not induce expression of cellular markers of browning in adipose tissue. There was no effect of diet or exercise on skeletal muscle thermogenesis. Combined diet and exercise increased the expression of neuropeptide Y and agouti-related protein in the hypothalamic arcuate nucleus ( P < 0.05), consistent with reduced adiposity. Gene expressions of key hypothalamic appetite-regulating peptides were not associated with altered thermogenesis. We demonstrate that exercise counteracts the inhibitory effect of caloric restriction to restore thermogenesis in adipose tissue of sheep.-Fuller-Jackson, J.-P., Clarke, I. J., Rao, A., Henry, B. A. Exercise counteracts the homeostatic decrease in thermogenesis caused by caloric restriction in sheep.