Reduced de novo lipogenesis in adipose tissue, often observed in obese individuals, is thought to contribute to insulin resistance. Besides trapping excess glucose and providing for triglycerides and energy storage, endogenously synthesized lipids can function as potent signaling molecules. Indeed, several specific lipids and their molecular targets that mediate insulin sensitivity have been recently identified. Here, we report that carbohydrate-response element-binding protein (ChREBP), a transcriptional inducer of glucose use and de novo lipogenesis, controls the activity of the adipogenic master regulator peroxisome proliferator-activated receptor (PPAR)γ. Expression of constitutive-active ChREBP in precursor cells activated endogenous PPARγ and promoted adipocyte differentiation. Intriguingly, ChREBP-constitutive-active ChREBP expression induced PPARγ activity in a fatty acid synthase-dependent manner and by trans-activating the PPARγ ligand-binding domain. Reducing endogenous ChREBP activity by either small interfering RNA-mediated depletion, exposure to low-glucose concentrations, or expressing a dominant-negative ChREBP impaired differentiation. In adipocytes, ChREBP regulated the expression of PPARγ target genes, in particular those involved in thermogenesis, similar to synthetic PPARγ ligands. In summary, our data suggest that ChREBP controls the generation of endogenous fatty acid species that activate PPARγ. Thus, increasing ChREBP activity in adipose tissue by therapeutic interventions may promote insulin sensitivity through PPARγ.