The PPARgamma is a key adipogenic determination factor. Ligands for PPARgamma such as antidiabetic thiazolidinedione (TZD) compounds are adipogenic, and many adipocyte genes that are activated by TZDs contain binding sites for PPARgamma. Like ligands for other nuclear receptors, TZDs can regulate genes positively or negatively. Here, we sought to understand the importance of positive regulation of gene expression by PPARgamma in adipogenesis. Fusion of the potent viral transcriptional activator VP16 to PPARgamma2 (VP16-PPARgamma) created a transcription factor that constitutively and dramatically activated transcription of PPARgamma-responsive genes in the absence of ligand. Forced expression of VP16-PPARgamma in 3T3-L1 preadipocytes using retroviral vectors led to adipogenesis in the absence of standard differentiating medium or any exogenous PPARgamma ligand. Gene microarray analysis revealed that VP16-PPARgamma induced many of the genes associated with adipogenesis and adipocyte function. Thus, direct up-regulation of gene expression by PPARgamma is sufficient for adipogenesis. TZD-induced adipogenesis up-regulated many of the same genes, although some were divergently regulated, including resistin, whose gene expression was reduced inVP16-PPARgamma adipocytes treated with TZDs. These results show that, although activation of PPARgamma by a heterologous activation domain is sufficient for adipogenesis, it is not equivalent to TZD treatment. This conclusion has important implications for understanding biological effects of the TZDs on adipogenesis and insulin sensitization.