AbstractShikonin, 5,6‐dihydroxyflavone‐7‐glucuronic acid, is the main ingredient of Lithospermum erythrorhizon Sieb. et Zucc, and was reported to have various biological activities including antiinflammatory, anticancer, antimicrobial and others. This study aimed to elucidate, for the first time, the antiobesity activity of shikonin and its mechanism of action. Shikonin was found to inhibit fat droplet formation and triglyceride accumulation in 3T3‐L1 adipocytes. The half inhibitory concentration, IC50, for the inhibition of triglyceride accumulation was found to be 1.1 μM. The expression of genes involved in lipid metabolism, such as FABP4 and LPL, were significantly inhibited following shikonin treatment. Shikonin also inhibited the ability of PPARγ and C/EBPα, the major transcription factors of adipogenesis, to bind to their target DNA sequences. The expressions of mRNA and protein of PPARγ and C/EBPa were significantly down‐regulated following shikonin treatment. Among the upstream regulators of adipogenesis, only SREBP1C was found to be down‐regulated by shikonin. The results of this study suggest that shikonin down‐regulates the expression of SREBP1C and subsequently the expression of PPARγ and C/EBPα. Together, these changes result in the down‐regulation of lipid metabolizing enzymes and reduced fat accumulation. Copyright © 2009 John Wiley & Sons, Ltd.