Decreased expression of mitochondrial frataxin (FXN) causes Friedreich's ataxia (FRDA), a neurodegenerative disease with type 2 diabetes (T2D) as severe comorbidity. Brown adipose tissue (BAT) is a mitochondria-enriched and anti-diabetic tissue that turns excess energy into heat to maintain metabolic homeostasis. Here we report that the FXN knock-in/knock-out (KIKO) mouse shows hyperlipidemia, reduced energy expenditure and insulin sensitivity, and elevated plasma leptin, recapitulating T2D-like signatures. FXN deficiency leads to disrupted mitochondrial ultrastructure and oxygen consumption as well as lipid accumulation in BAT. Transcriptomic data highlights cold intolerance in association with iron-mediated cell death (ferroptosis). Impaired PKA-mediated lipolysis and expression of genes controlling mitochondrial metabolism, lipid catabolism and adipogenesis were observed in BAT of KIKO mice as well as in FXN-deficient T37i brown and primary adipocytes. Significant susceptibility to ferroptosis was observed in adipocyte precursors that showed increased lipid peroxidation and decreased glutathione peroxidase 4. Collectively our data point to BAT dysfunction in FRDA and suggest BAT as promising therapeutic target to overcome T2D in FRDA.