Overexpression of the nuclear form of sterol regulatory element-binding protein-1c (nSREBP-1c/ADD1) in cultured 3T3-L1 preadipocytes was shown previously to promote adipocyte differentiation. Here, we produced transgenic mice that overexpress nSREBP-1c in adipose tissue under the control of the adipocyte-specific aP2 enhancer/promoter. A syndrome with the following features was observed: (1) Disordered differentiation of adipose tissue. White fat failed to differentiate fully, and the size of white fat depots was markedly decreased. Brown fat was hypertrophic and contained fat-laden cells resembling immature white fat. Levels of mRNA encoding adipocyte differentiation markers (C/EBPα, PPARγ, adipsin, leptin, UCP1) were reduced, but levels of Pref-1 and TNFα were increased. (2) Marked insulin resistance with 60-fold elevation in plasma insulin. (3) Diabetes mellitus with elevated blood glucose (>300 mg/dl) that failed to decline when insulin was injected. (4) Fatty liver from birth and elevated plasma triglyceride levels later in life. These mice exhibit many of the features of congenital generalized lipodystrophy (CGL), an autosomal recessive disorder in humans.