Stromal-vascular cells from the epididymal fat pad of 4-week-old rats, when cultured in a medium containing insulin or insulin-like growth factor, IGF-I, triiodothyronine and transferrin, were able to undergo adipose conversion. Over ninety percent of the cells accumulated lipid droplets and this proportion was reduced in serum-supplemented medium. The adipose conversion was assessed by the development of lipoprotein lipase (LPL) and glycerol-3-phosphate dehydrogenase (GPDH) activities, [14C]glucose incorporation into polar and neutral lipids, triacylglycerol accumulation and lipolysis in response to isoproterenol. Similar results were obtained with stromal-vascular cells from rat subcutaneous and retroperitoneal adipose tissues. Stromal-vascular cells required no adipogenic factors in addition to the components of the serum-free medium. Insulin was required within a physiological range of concentrations for the emergence of LPL and at higher concentrations for that of GPDH. When present at concentrations ranging from 2 to 50 nM, IGF-I was able to replace insulin for the expression of both LPL and GPDH. The development of a serum-free, chemically defined medium for the differentiation of diploid adipose precursor cells opens up the possibility of characterizing inhibitors or activators of the adipose conversion process.