Fibroblastic preadipocyte cells are recruited to differentiate into new adipocytes during the formation and hyperplastic growth of white adipose tissue. Peroxisome proliferator-activated receptor γ (PPARγ), the master regulator of adipogenesis, is expressed at low levels in preadipocytes, and its levels increase dramatically and rapidly during the differentiation process. However, the mechanisms controlling the dynamic and selective expression of PPARγ in the adipocyte lineage remain largely unknown. We show here that the zinc finger protein Evi1 increases in preadipocytes at the onset of differentiation prior to increases in PPARγ levels. Evi1 expression converts nonadipogenic cells into adipocytes via an increase in the predifferentiation levels of PPARγ2, the adipose-selective isoform of PPARγ. Conversely, loss of Evi1 in preadipocytes blocks the induction of PPARγ2 and suppresses adipocyte differentiation. Evi1 binds with C/EBPβ to regulatory sites in the Pparγ locus at early stages of adipocyte differentiation, coincident with the induction of Pparγ2 expression. These results indicate that Evi1 is a key regulator of adipogenic competency.