Brown adipose tissue (BAT) thermogenesis increases energy expenditure (EE). Expanding the volume of active BAT via transplantation holds promise as a therapeutic strategy for morbid obesity and diabetes. Brown adipose progenitor cells (BAPCs) can be isolated and expanded to generate autologous brown adipocyte implants. However, the transplantation of brown adipocytes is currently impeded by poor efficiency of BAT tissue formation in vivo and undesirably short engraftment time. In this study, we demonstrated that transplanting BAPCs into limb skeletal muscles consistently led to the ectopic formation of uncoupling protein 1 (UCP1)+pos adipose tissue with long‐term engraftment (>4 mo). Combining VEGF with the BAPC transplant further improved BAT formation in muscle. Ectopic engraftment of BAPC‐derived BAT in skeletal muscle augmented the EE of recipient mice. Although UCP1 expression declined in long‐term BAT grafts, this deterioration can be reversed by swimming exercise because of sympathetic activation. This study suggests that intramuscular transplantation of BAPCs represents a promising approach to deriving functional BAT engraftment, which may be applied to therapeutic BAT transplantation and tissue engineering.—Liu, Y., Fu, W., Seese, K., Yin, A., Yin, H. Ectopic brown adipose tissue formation within skeletal muscle after brown adipose progenitor cell transplant augments energy expenditure. FASEB J. 33, 8822–8835 (2019). http://www.fasebj.org