Normal metabolic balance is maintained by a complex homeostatic system involving multiple tissues and organs. Acquired or inherited defects in any part of this system can lead to metabolic disorders, such as diabetes and obesity. Adipose tissue, once thought to function primarily as a passive depot for the storage of excess lipid, is now understood to play a much more active role in metabolic regulation, secreting a variety of metabolic hormones and actively functioning to prevent deleterious lipid accumulation in other tissues. Here, we review new advances in our understanding of adipogenesis and fat-cell function, primarily from the perspective of the transcription factor peroxisome proliferator-activated receptor γ.