In brown adipose tissue, cold exposure promotes thermogenesis, in large part by increasing mitochondrial -oxidation of lipid droplet-derived fatty acids. This process is suppressed by thioesterase superfamily member 1 (Them1), a long chain fatty acyl-CoA thioesterase that is highly upregulated by cold ambient temperatures. Them1 reduces fatty acid availability for oxidation in mitochondria and limits thermogenesis by cellular mechanisms that are not well defined. We show that Them1 regulates metabolism by undergoing marked intracellular conformational changes that occur in response to -adrenergic stimulation. Mechanistically, Them1 formed puncta that were localized near LD and mitochondria in an immortalized brown adipose cell line. In response to stimulation by norepinephrine, Them1 was phosphorylated by PKC at S15, which specifically inhibited puncta formation and resulted in a diffuse intracellular localization. This change in Them1 localization also occurred after stimulation in vivo. Puncta formation activated Them1 metabolic activity in vitro, as evidenced by suppression of oxygen consumption following -adrenergic stimulation. We show by correlative light and electron microscopy that puncta are biomolecular condensates (also known as membraneless organelles) that typically form by phase separation. Them1 contains one intrinsically disordered region at the N-terminus with multiple interacting motifs that is frequently observed in phaseseparating proteins. Phosphorylation, which is known to disrupt phase separation and aggregation, results in a diffuse Them1 localization. Our data thus establish that Them1 forms intracellular biomolecular condensates that limit fatty acid oxidation and suppress thermogenesis. During a period of energy demand, the condensates are disrupted by phosphorylation to allow for maximal thermogenesis. The stimulus-coupled reorganization of Them1 thus provides fine-tuning of thermogenesis and energy expenditure.