Macrophage differentiation plays a pivotal role in cardiovascular diseases and many other physiological processes. However, the role of reaction oxygen species in macrophage differentiation has not been elucidated. Here, we report functional characterization of catalase, an enzyme that degrades hydrogen peroxide (H(2)O(2)), in THP-1 monocyte differentiation. Treatment of THP-1 cells with catalase was able to synergize with all-trans retinoic acid (ATRA) to enhance macrophage differentiation, demonstrated by changes of cell adherence, cell cycle arrest, nitroblue tetrazolium reduction, and expression of differentiation markers including CD68, CD11b, and matrix metalloproteinase 9 (MMP9). ATRA could stimulate retinoic acid (RA) receptor-mediated transcription, but this was not affected by catalase. However, ATRA and catalase were capable of reducing transcriptional activity mediated by peroxisome proliferator-activated receptor gamma (PPARgamma). Consistently, PPARgamma antagonists enhanced, and PPARgamma agonists inhibited MMP9 expression stimulated by ATRA and catalase in THP-1 cells. Therefore, these data indicate that catalase is able to potentiate ATRA-induced macrophage differentiation by inhibition of PPARgamma activity, underscoring an important interplay between H(2)O(2), RA, and PPARgamma in macrophages.