Recent advances regarding the biology of adipose tissue have identified the adipocyte as an important mediator in many physiologic and pathologic processes regarding energy metabolism. Consideration for a central role of adipose tissue in the development of obesity, cardiovascular disease and noninsulin-dependent diabetes mellitus has resulted in new incentives toward understanding the complexities of adipocyte differentiation. Current knowledge of this process includes a cascade of transcriptional events that culminate in the expression of peroxisome proliferator-activated receptor-gamma (PPARgamma) and CCAAT/enhancer binding protein-alpha (C/EBPalpha). These prominent adipogenic transcription factors have been shown to regulate, directly or indirectly, the gene expression necessary for the development of the mature adipocyte. Hormonal and nutritional signaling that impinges on these trans-acting factors provides a molecular link between lipids and lipid-related compounds and the gene expression important for glucose and lipid homeostasis. Knowledge concerning the transcriptional events mediating adipocyte differentiation provides a basis for understanding the physiologic processes associated with adipose tissue as well as for the development of therapeutic interventions in obesity and its related disorders.