Current treatments for type 1 diabetes (T1D) focus on optimizing insulin replacement. We demonstrate the therapeutic potential of the large secreted protein fraction from brown adipose tissue (BAT), independent of insulin. This secreted fraction mediates insulin receptor-dependent recovery of euglycemia in diabetic nonobese diabetic (NOD) mice by suppressing glucagon secretion. It also promotes white adipocyte differentiation and browning, and enhances glucose uptake in adipose tissue, skeletal muscle, and liver. From this fraction, we identify nidogen-2 as a brown adipocyte-secreted factor that reverses hyperglycemia in T1D NOD, inhibits glucagon secretion from pancreatic α-cells, and mimics other actions of the secreted fraction. These findings provide proof of principle that the pleiotropic effects of BAT-derived peptides represent a novel approach to diabetes management.