The nuclear hormone receptor, peroxisome proliferator-activated receptor (PPAR)-gamma, originally identified as a key mediator of adipogenesis, is expressed widely and implicated in diverse biological responses. Both natural and synthetic agonists of PPAR-gamma abrogated the stimulation of collagen synthesis and myofibroblast differentiation induced by transforming growth factor (TGF)-beta in vitro. To characterize the role of PPAR-gamma in the fibrotic process in vivo, the synthetic agonist rosiglitazone was used in a mouse model of scleroderma. Rosiglitazone attenuated bleomycin-induced skin inflammation and dermal fibrosis as well as subcutaneous lipoatrophy and counteracted the up-regulation of collagen gene expression and myofibroblast accumulation in the lesioned skin. Rosiglitazone treatment reduced the induction of the early-immediate transcription factor Egr-1 in situ without also blocking the activation of Smad2/3. In both explanted fibroblasts and skin organ cultures, rosiglitazone prevented the stimulation of collagen gene transcription and cell migration elicited by TGF-beta. Rosiglitazone-driven adipogenic differentiation of both fibroblasts and preadipocytes was abrogated in the presence of TGF-beta; this effect was accompanied by the concomitant down-regulation of cellular PPAR-gamma mRNA expression. Collectively, these results indicate that rosiglitazone treatment attenuates inflammation, dermal fibrosis, and subcutaneous lipoatrophy via PPAR-gamma in a mouse model of scleroderma and suggest that pharmacological PPAR-gamma ligands, widely used as insulin sensitizers in the treatment of type-2 diabetes mellitus, may be potential therapies for scleroderma.