Transcription regulator that acts both as a histone methyltransferase or chromatin adapter, depending on the context (PubMed:12816872). In the cytoplasm, acts as a histone methyltransferase, which catalyzes monomethylation of 'Lys-9' of free histone H3 (H3K9me1) during translation (By similarity). Monomethylated histone H3 is then transported to the nucleus and incorporated into nucleosomes where SUV39H methyltransferases (SUV39H1 and SUV39H2) use it as a substrate to catalyze histone H3 'Lys-9' trimethylation (H3K9me3) (By similarity). Probably one of the primary histone methyltransferases along with MECOM/PRDM3 that direct cytoplasmic H3K9me1 methylation (By similarity). In the nucleus, acts as a key chromatin adapter that mediates differentiation of brown and beige adipocytes, which are specialized in dissipating chemical energy in the form of heat in response to cold or excess feeding (By similarity). Following recruitment to chromatin by PPARG nuclear receptor, promotes differentiation of myoblastic precursors into brown adipose cells (By similarity). Mechanistically, acts by mediating recruitment of (1) EHMT1 histone methyltransferase, thereby inhibiting the expression of white adipose-selective genes or (2) mediator complex, activating genes that are highly expressed in brown adipocytes, such as UCP1, PPARA, and PPARGC1A (By similarity). Also mediates differentiation of beige adipocytes from white adipose cells following recruitment by PPARG (By similarity). In addition to adipocyte differentiation, also involved in tolerance to gut microbiota: following recruitment to chromatin by RORgammaT (RORC) in a subset of antigen-presenting cells, promotes differentiation of peripherally-induced regulatory T-cells (pTreg), which suppress inflammatory responses to commensal microorganisms (By similarity). Also required in adult heart to preserve mitochondrial function and inhibit hypertrophy with advanced age (By similarity). Functions as a repressor of TGF-beta signaling (PubMed:19049980). {ECO:0000250|UniProtKB:A2A935, ECO:0000269|PubMed:12816872, ECO:0000269|PubMed:19049980}. [Isoform 4]: Binds DNA and functions as a transcriptional regulator (PubMed:12816872). Functions as a repressor of TGF-beta signaling (PubMed:14656887). May regulate granulocyte differentiation (PubMed:12816872). {ECO:0000269|PubMed:12816872, ECO:0000269|PubMed:14656887}. This is the function of PRDM16 (PR/SET domain 16, Ensembl gene identifier ENSG00000142611).