Mice deficient in C/EBPα have defective development of adipose tissue, but the precise role of C/EBPα has not been defined. Fibroblasts from C/EBPα(−/−) mice undergo adipose differentiation through expression and activation of PPARγ, though several clear defects are apparent. C/EBPα-deficient adipocytes accumulate less lipid, and they do not induce endogenous PPARγ, indicating that cross-regulation between C/EBPα and PPARγ is important in maintaining the differentiated state. The cells also show a complete absence of insulin-stimulated glucose transport, secondary to reduced gene expression and tyrosine phosphorylation for the insulin receptor and IRS-1. These results define multiple roles for C/EBPα in adipogenesis and show that cross-regulation between PPARγ and C/EBPα is a key component of the transcriptional control of this cell lineage.