Green tea intake has been shown to confer various health benefits to patients suffering from metabolic disorders. Here, we studied the effect of several major green tea polyphenols on adipocyte differentiation in human bone marrow mesenchymal stem cells (hBM-MSCs) and compared it to the effect of representative antidiabetic drugs. (-)-Catechin was the most potent of the eight green tea polyphenols evaluated in promoting adipocyte differentiation in hBM-MSCs, and this effect was dose-dependent. (-)-Catechin increased the mRNA levels of various adipogenic markers, such as adiponectin, peroxisome proliferator-activated receptor gamma (PPARgamma), FABP4, and LPL, as measured during adipocyte differentiation in hBM-MSCs. In addition, (-)-catechin upregulated the secretion of adiponectin in hBM-MSC culture. Using a reporter gene assay and a competitive ligand binding study, (-)-catechin also significantly activated PPARgamma in a dose-dependent fashion; however, (+)-catechin, the enantiomer of (-)-catechin, was not effective as a PPARgamma agonist, which seems to imply that the effect of (-)-catechin on PPARgamma is stereospecific. In conclusion, our data suggest that (-)-catechin promotes adipocyte differentiation and increased sensitivity to insulin in part by direct activation of PPARgamma, which could be at the basis of the observed pharmacological benefits of green tea intake in reducing the risk of type 2 diabetes.