Distributed Source Coding (DSC) based signal processing applications involve data transmissions at multirates in Wireless Sensor Network (WSN). In this paper, we propose a novel cross layer approach in WSN to achieve energy efficiency using multirates desirable for the DSC based signal processing applications and current network conditions. Our approach can be summarized into two parts: first, energy efficient multirate MAC-PHY supporting DSC applications; and second, rate oriented interaction of MAC-PHY and DSC applications. Multirate MAC-PHY utilizes desirable Bit Error Rate (BER), channel attenuation, corresponding modulation schemes, and multirate requirements, to determine the minimum desirable transmission power. Rate oriented interaction provides optimal transmission rates feedback to interact with DSC applications, making DSC applications adaptively adjust information coding rate according to network conditions. This interactive approach achieves further energy saving significantly by making the DSC application aware of WSN conditions. Besides DSC, this work can be easily extended to other multirate signal processing applications in WSN.