During the course of differentiation of preadipocytes into adipocytes, several differentiation-linked genes are activated synchronously with morphological changes. To follow this process we have used 3T3-F442A cells, known to undergo adipocyte conversion with high frequency. Accumulation of lipid droplets in the cytoplasm constitutes an easily visualized sign of the terminally differentiated phenotype. In this report we demonstrate that expression of the CCAAT/enhancer binding protein (C/EBP) is an important factor in determining the ability to accumulate lipid droplets in terminally differentiated adipocytes. In one experiment we can suppress C/EBP expression through administration of hydrocortisone to differentiating 3T3-F442A cells, which is accompanied by an inability of the cells to accumulate lipid. In another experiment a C/EBP antisense expression vector has been stably introduced into 3T3-F442A cells and as compared with control cells, a 62% decrease of C/EBP mRNA (p less than 0.01) is demonstrated. This decrease of C/EBP mRNA is accompanied by a change in cellular morphology characterized by a reduced ability to form lipid droplets. We can also demonstrate a correlation between the degree of reduction of C/EBP mRNA and the amount of lipid present in the cells. These findings strongly support the view that C/EBP is a necessary component of terminal adipocyte differentiation.