Studies have shown that CCAAT/enhancer-binding protein beta (C/EBP beta) can stimulate adipogenesis in noncommitted fibroblasts by activating expression of peroxisome proliferator-activated receptor-gamma (PPARgamma). Other investigations have established a role for C/EBP alpha as well as PPARgamma in orchestrating the complex program of adipogenic gene expression during terminal preadipocyte differentiation. Consequently, it is important to identify factors regulating transcription of the C/ebp alpha gene. In this study, we demonstrated that inhibition of PPARgamma activity by exposure of 3T3-L1 preadipocytes to a potent and selective PPARgamma antagonist inhibits adipogenesis but also blocks the activation of C/EBP alpha expression at the onset of differentiation. Ectopic expression of C/EBP beta in Swiss 3T3 mouse fibroblasts (Swiss-LAP cells) induces PPARgamma expression without any significant enhancement of C/EBP alpha expression. Treatment of Swiss-LAP cells with a PPARgamma agonist induces adipogenesis, which includes activation of C/EBP alpha expression. To further establish a role for PPARgamma in regulating C/EBP alpha expression, we expressed C/EBP beta in PPARgamma-deficient mouse embryo fibroblasts (MEFs). The data show that C/EBP beta is capable of inducing PPARgamma in Ppar gamma+/- MEFs, which leads to activation of adipogenesis, including C/EBP alpha expression following exposure to a PPARgamma ligand. In contrast, C/EBP beta is not able to induce C/EBP alpha expression or adipogenesis in Ppar gamma-/- MEFs. Chromatin immunoprecipitation analysis reveals that C/EBP beta is bound to the minimal promoter of the C/ebp alpha gene in association with HDAC1 in unstimulated Swiss-LAP cells. Exposure of the cells to a PPARgamma ligand dislodges HDAC1 from the proximal promoter of the C/ebp alpha gene, which involves degradation of HDAC1 in the 26 S proteasome. These data suggest that C/EBP beta activates a single unified pathway of adipogenesis involving its stimulation of PPARgamma expression, which then activates C/EBP alpha expression by dislodging HDAC1 from the promoter for degradation in the proteasome.