Mitochondria associate with lipid droplets (LDs) in fat-oxidizing tissues, but the functional role of these peridroplet mitochondria (PDM) is unknown. Microscopic observation of interscapular brown adipose tissue reveals that PDM have unique protein composition and cristae structure and remain adherent to the LD in the tissue homogenate. We developed an approach to isolate PDM based on their adherence to LDs. Comparison of purified PDM to cytoplasmic mitochondria reveals that (1) PDM have increased pyruvate oxidation, electron transport, and ATP synthesis capacities; (2) PDM have reduced β-oxidation capacity and depart from LDs upon activation of brown adipose tissue thermogenesis and β-oxidation; (3) PDM support LD expansion as Perilipin5-induced recruitment of mitochondria to LDs increases ATP synthase-dependent triacylglyceride synthesis; and (4) PDM maintain a distinct protein composition due to uniquely low fusion-fission dynamics. We conclude that PDM represent a segregated mitochondrial population with unique structure and function that supports triacylglyceride synthesis.