In humans, glucocorticoids are important regulators of adipose tissue distribution and function but circulating cortisol concentrations are normal in most patients with obesity. However, intracellular glucocorticoid levels can be modified by a microsomal enzyme 11beta-hydroxysteroid dehydrogenase type 1 (11beta-HSD1) expressed mainly in the liver and adipose tissue. Locally generated cortisol within human adipose tissue can induce preadipocyte differentiation, but the relationship between 11beta-HSD1 expression and adipogenesis is unknown. Our present study has shown that in intact, undifferentiated omental (OM) but not subcutaneous (SC) preadipocytes, 11beta-HSD1 acts primarily as a dehydrogenase inactivating cortisol to cortisone. When preadipocytes become "committed" to adipocyte differentiation, oxo-reductase activity predominates generating cortisol. Since glucocorticoids are not only essential for OM preadipocyte differentiation but also inhibit cell proliferation, we postulate that 11beta-HSD1 dehydrogenase activity in "uncommitted" OM preadipocytes may provide an autocrine mechanism to protect preadipocytes from differentiation, in turn facilitating their proliferation. Once early differentiation is initiated, a "switch" to 11beta-HSD1 oxo-reductase activity generates cortisol, thus promoting adipogenesis. The differences in set-point of 11beta-HSD1 activity between OM and SC human adipose tissue may be an important factor in the pathogenesis of visceral obesity.