Abstract Body: Obesity and its associated metabolic dysfunction are characterized by impaired adipose tissue remodeling and systemic dyslipidemia. Procollagen Endopeptidase Enhancer Protein 2 (Pcpe2), a secreted ECM-associated protein, has been implicated in both collagen processing and lipid metabolism, though its function in adipose biology is largely uncharacterized. This study investigates the systemic and cellular role of Pcpe2 in metabolic health using adipose-specific knockout mice (Adip⁺pcpe2^KO). Compared to control littermates, Adip⁺Pcpe2^KO mice exhibited a significantly leaner phenotype, marked by reduced body weight (25% reduction, p<0.001, n=11), a collective decline in adipose tissue mass (~29% reduction, p<0.001, n=12) with decreased visceral (VAT), subcutaneous (SAT), and brown (BAT) adipose tissue mass. Metabolically, Adip⁺Pcpe2^KO mice displayed improved systemic health including reduced plasma LDL (27% reduction, p<0.01, n=8) and glucose levels (23% decline, p<0.01, n=6). This lean phenotype was attributed to increased energy expenditure both, at whole body (p<0.03, n=8) as determined using Promethion metabolic cage system, as well as cellular level (increased basal respiration and proton leakage), driven by enhanced adipocyte differentiation (p<0.01, n=6) and notable browning/beiging of white adipose tissue (WAT). Interestingly, VLDL/LDL uptake was significantly upregulated (p<0.05, n=5) in the Adip⁺Pcpe2^KO mice, providing a metabolic substrate that may explain the marked increase in WAT beiging. Collectively, these findings suggest that Pcpe2 acts as a negative regulator of systemic energy balance including adipogenesis and beiging. By limiting the internalization of lipids crucial for adipocyte differentiation and the thermogenic program, Pcpe2 facilitates metabolic dysfunction. The targeted removal of Pcpe2 overcomes this metabolic barrier, resulting in a healthier, hyperplasic, and more metabolically active adipose phenotype. Pcpe2 thus emerges as a novel and compelling therapeutic target for treating obesity and metabolic disease.