Dedifferentiated liposarcoma can be readily diagnosed by the juxtaposition of a well-differentiated liposarcoma to a nonlipogenic sarcoma. However, if the lipogenic component is not abundant due to surgical sampling or small biopsy, dedifferentiated liposarcoma can be difficult to distinguish from other poorly different sarcomas. Peroxisome proliferator-activated receptor gamma (PPAR-gamma) is a nuclear hormone receptor that plays a critical role in adipocyte differentiation. Prior studies have not only demonstrated PPAR-gamma mRNA in various subtypes of liposarcoma but have also shown that adipocyte differentiation can be induced in some liposarcomas by a PPAR-gamma agonist. In the present study, we investigated whether immunostaining for PPAR-gamma can be used to distinguish dedifferentiated liposarcoma from other retroperitoneal sarcomas. We examined a series of 40 dedifferentiated liposarcoma and compared the staining for PPAR-gamma to a series of 24 retroperitoneal sarcomas that lacked lipogenic differentiation. A monoclonal antibody against PPAR-gamma was used to stain formalin-fixed paraffin-embedded tissue. Specific nuclear immunostaining was present in 37/40 (93%) of the dedifferentiated liposarcoma and 6/24 (25%) of the other sarcomas (two leiomyosarcomas and four undifferentiated sarcomas). Interestingly, immunostaining for CDK4 and/or MDM2 was identified in three of the four PPAR-gamma-positive undifferentiated sarcomas, raising the possibility that these may represent dedifferentiated liposarcoma. This is the first study demonstrating the utility of PPAR-gamma immunohistochemistry in the diagnosis of dedifferentiated liposarcoma in tissue sections. Although not completely specific, the presence of PPAR-gamma staining, in combination with histologic findings and other markers, can aid in the diagnosis of dedifferentiated liposarcoma, particularly on small biopsies that may not sample the well-differentiated component.