We recently cloned PPAR gamma as a factor that binds to an enhancer which has specificity for adipose cells. When expressed ectopically, PPAR gamma converts fibroblasts into bona fide preadipose cells. Upon application of activators or PPAR gamma ligands, these cells differentiate into fat cells. Most recently, we have been trying to understand the nature of natural ligands that activate PPAR gamma and the protein domains that control adipogenesis. With regards to ligands, we have shown that an unusual prostanoid, 15-deoxy delta 12,14PG J2, can bind to PPAR gamma and activate it. A second transcription factor that is induced early in differentiation, ADD1/SREBP1, appears to promote the formation of PPAR gamma ligands. Transfection of this molecule, a member of the bHLH family, causes the secretion of molecules that can serve as ligands for PPAR gamma. This ligand-like activity is specific for the gamma isoform of PPAR. Current studies are attempting to identify these potentially novel ligands. With regard to structure-function of PPAR gamma, we first analyzed the adipogenic activity of the three isoforms of PPAR: alpha, gamma and delta. Using appropriate activators of each it is clear that PPAR gamma has the most adipogenic action. PPAR alpha can be adipogenic with high levels of the strongest activators and PPAR delta does not stimulate fat cell differentiation. To identify the domain(s) of PPAR gamma responsible for differentiation, chimeras between PPAR gamma and PPAR delta were created and transfected into fibroblasts. This has allowed the isolation of relatively small regions of this molecule that are responsible for differentiation.