Recent data suggest that proinflammatory cytokines secreted from adipose tissue contribute to the morbidity associated with obesity. However, characterization of the cell types involved in inflammation and how these cells promote insulin resistance in human adipocytes are unclear. We simulated acute inflammation using the endotoxin lipopolysaccharide (LPS) to define the roles of nonadipocytes in primary cultures of human adipocytes. LPS induction of the mRNA levels of proinflammatory cytokines (e.g. IL-6, TNF-alpha, and IL-1beta) and chemokines (e.g. IL-8, monocyte chemoattractant protein-1) occurred primarily in the nonadipocyte fraction of newly differentiated human adipocytes. Nonadipocytes were characterized as preadipocytes based on their abundant mRNA levels of preadipocyte markers preadipocyte factor-1 and adipocyte enhancer protein-1 and only trace levels of markers for macrophages and myocytes. The essential role of preadipocytes in inflammation was confirmed by modulating the degree of differentiation in the cultures from approximately 0-90%. LPS-induced proinflammatory cytokine/chemokine expression and nuclear factor-kappaB and MAPK signaling decreased as differentiation increased. LPS-induced cytokine/chemokine expression in preadipocytes was associated with: 1) decreased adipogenic gene expression, 2) decreased ligand-induced activation of a peroxisome proliferator activated receptor (PPAR)-gamma reporter construct and increased phosphorylation of PPARgamma, and 3) decreased insulin-stimulated glucose uptake. Collectively, these data demonstrate that LPS induces nuclear factor-kappaB- and MAPK-dependent proinflammatory cytokine/chemokine expression primarily in preadipocytes, which triggers the suppression of PPARgamma activity and insulin responsiveness in human adipocytes.