Oestrogen, often via oestrogen receptor alpha (ERα) signalling, regulates metabolic physiology, highlighted by post-menopausal temperature dysregulation (hot flashes), glucose intolerance, increased appetite and reduced metabolic rate. Here we show that ERα signalling has a role in adipose lineage specification in mice. ERα regulates adipose progenitor identity and potency, promoting white adipogenic lineage commitment. White adipose progenitors lacking ERα reprogramme and enter into smooth muscle and brown adipogenic fates. Mechanistic studies highlight a TGFβ programme involved in progenitor reprogramming downstream of ERα signalling. The observed reprogramming has profound metabolic outcomes; both female and male adipose-lineage ERα-mutant mice are lean, have improved glucose sensitivity and are resistant to weight gain on a high-fat diet. Further, they are hypermetabolic, hyperphagic and hyperthermic, all consistent with a brown phenotype. Together, these findings indicate that ERα cell autonomously regulates adipose lineage commitment, brown fat and smooth muscle cell formation, and systemic metabolism, in a manner relevant to prevalent metabolic diseases.