Obesity is characterized by an expanded adipose tissue mass, and reversing obesity reduces the risk of insulin resistance and cardiovascular disease. Ciliary neurotrophic factor (CNTF) reverses obesity by promoting the preferential loss of white adipose tissue. We evaluated the cellular and molecular mechanisms by which CNTF regulates adiposity. Obese mice fed a high-fat diet were treated with saline or recombinant CNTF for 10 d, and adipose tissue was removed for analysis. Another group fed a high-fat diet was pair fed to CNTF mice. In separate experiments, 3T3-L1 adipocytes were treated with CNTF to examine metabolic responses and signaling. CNTF reduced adipose mass that resulted from reductions in adipocyte area and triglyceride content. CNTF treatment did not affect lipolysis but resulted in decreases in fat esterification and lipogenesis and enhanced fatty acid oxidation. The enhanced fat oxidation was associated with the expression of peroxisome proliferator-activated receptor coactivator-1alpha (PGC1alpha) and nuclear respiratory factor 1 and increases in oxidative phosphorylation subunits and mitochondrial biogenesis as determined by electron microscopy. Studies in cultured adipocytes revealed that CNTF activates p38 MAPK and AMP-activated protein kinase. Inhibiting p38 activation prevented the CNTF-induced increase in PGC1alpha but not AMP-activated protein kinase activation. Diminished food intake with pair feeding induced similar decreases in fat mass, but this was related to increased expression of uncoupling protein 1. We conclude that CNTF reprograms adipose tissue to promote mitochondrial biogenesis, enhancing oxidative capacity and reducing lipogenic capacity, thereby resulting in triglyceride loss.