Binds DNA and functions as a transcriptional regulator (PubMed:18483224). Displays histone methyltransferase activity and monomethylates 'Lys-9' of histone H3 (H3K9me1) in vitro (PubMed:22939622). Probably catalyzes the monomethylation of free histone H3 in the cytoplasm which is then transported to the nucleus and incorporated into nucleosomes where SUV39H methyltransferases use it as a substrate to catalyze histone H3 'Lys-9' trimethylation (PubMed:22939622). Likely to be one of the primary histone methyltransferases along with MECOM/PRDM3 that direct cytoplasmic H3K9me1 methylation (PubMed:22939622). Functions in the differentiation of brown adipose tissue (BAT) which is specialized in dissipating chemical energy in the form of heat in response to cold or excess feeding while white adipose tissue (WAT) is specialized in the storage of excess energy and the control of systemic metabolism (PubMed:17618855, PubMed:18483224). Together with CEBPB, regulates the differentiation of myoblastic precursors into brown adipose cells (PubMed:18719582, PubMed:19641492). Functions as a repressor of TGF-beta signaling. L-lysyl(9)-[histone H3] + S-adenosyl-L-methionine = H(+) + N(6)-methyl-L-lysyl(9)-[histone H3] + S-adenosyl-L-homocysteine Interacts with CEBPA, CEBPB and CEBPD; the interaction is direct (PubMed:19641492). Interacts with PPARG and PPARA; controls brown adipocytes (PubMed:18719582). Interacts with CTBP1 and CTBP2; represses the expression of WAT-specific genes (PubMed:18483224). Interacts with PPARGC1A and PPARGC1B; interaction with PPARGC1A or PPARGC1B activates the transcription of BAT-specific gene (PubMed:18483224, PubMed:17618855). Interacts with HDAC1, SKI and SMAD2; the interaction with SKI promotes the recruitment of SMAD3-HDAC1 complex on the promoter of TGF-beta target genes (Probable). Interacts with ZNF516; the interaction is direct and may play a role in the transcription of brown adipose tissue-specific gene (PubMed:25578880). Enriched in BAT compared to WAT. Detected in heart, lung, kidney and brain. Expressed in nuclei of cardiomyocytes. Expressed at 12.5 dpc, 13.5 dpc and 14.5 dpc. Expressed in orofacial tissues, heart, liver, brain and limb bud. At 13.5 dpc, expressed throughout the ventricular myocardium, including endocardium and epicardium. Mice die at birth but embryos display altered brown adipose tissue differentiation. Belongs to the PRDM16 family.