We have previously demonstrated that PPARγ stimulates the terminal differentiation of adipocyte precursors when activated by synthetic ligands, such as the antidiabetic thiazolidinedione (TZD) drugs. We show here that PPARγ is expressed at significant levels in human primary and metastatic breast adenocarcinomas. Ligand activation of this receptor in cultured breast cancer cells causes extensive lipid accumulation, changes in breast epithelial gene expression associated with a more differentiated, less malignant state, and a reduction in growth rate and clonogenic capacity of the cells. Inhibition of MAP kinase, shown previously to be a powerful negative regulator of PPARγ, improves the TZD ligand sensitivity of nonresponsive cells. These data suggest that the PPARγ transcriptional pathway can induce terminal differentiation of malignant breast epithelial cells and thus may provide a novel, nontoxic therapy for human breast cancer.