Adipocyte differentiation is regulated by at least two families of transcription factors, CCAAT/enhancer binding proteins (C/EBPs) and peroxisome proliferator-activated receptors (PPARs). Induction of PPAR gamma gene transcription during the differentiation of preadipocytes into adipocytes in vitro occurs following an initial phase of cell proliferation and requires a direct involvement of C/EBP beta, C/EBP delta, and glucocorticoids. Ectopic expression of PPAR gamma in non-adipogenic, Swiss 3T3 fibroblasts promotes their conversion into adipocytes as indicated by the accumulation of lipid droplets and the induction of C/EBP alpha, aP2, insulin-responsive aminopeptidase (IRAP), and glucose transporter 4 (GLUT4) expression. These PPAR gamma-expressing Swiss cells also exhibit a high level of insulin-responsive glucose uptake that is comparable to that expressed in 3T3-L1 adipocytes. In contrast, PPAR gamma-expressing NIH-3T3 fibroblasts, despite similar lipid accumulation, adipocyte morphology, and aP2 expression, do not synthesize C/EBP alpha and fail to acquire insulin sensitivity. In Swiss 3T3 cells ectopically expressing PPAR gamma, the development of insulin-responsive glucose uptake correlates with C/EBP alpha expression. Furthermore, ectopic expression of C/EBP alpha in NIH-3T3 cells induces PPAR gamma expression and adipogenesis, but also restores insulin-sensitive glucose transport. These results suggest that although PPAR gamma is sufficient to trigger the adipogenic program, C/EBP alpha is required for establishment of insulin-sensitive glucose transport in adipocytes.