Adipocyte differentiation is regulated by at least two major transcription factors, CCAAT/enhancer-binding protein alpha (C/EBP alpha) and peroxisome proliferator-activated receptor gamma (PPAR gamma), Expression of PPAR gamma in fibroblasts converts them to fat-laden cells with an adipocyte-like morphology. Here, we investigate the ability of PPAR gamma to confer insulin-sensitive glucose transport to a variety of murine fibroblast cell lines. When cultured in the presence of a PPAR gamma ligand, Swiss-3T3 and BALB/c-3T3 cells ectopically expressing PPAR gamma accumulate lipid droplets, express C/EBP alpha, aP2, insulin-responsive aminopeptidase, and glucose transporter isoform 4 (GLUT4), and exhibit highly insulin-responsive 2-deoxyglucose uptake. In contrast, PPAR gamma-expressing NIH-3T3 cells, despite similar lipid accumulation, adipocyte morphology, and aP2 expression, do not express C/EBP alpha or GLUT4 and fail to acquire insulin sensitivity. In cells ectopically expressing PPAR gamma, the development of insulin-responsive glucose uptake correlates with C/EBP alpha expression. Furthermore, ectopic expression of C/EBP alpha in NIH-3T3 cells converts them to the adipocyte phenotype and restores insulin-sensitive glucose uptake. We propose that the pathway(s) leading to fat accumulation and morphological changes are distinct from that leading to insulin-dependent glucose transport. Our results suggest that although PPAR gamma is sufficient to trigger the adipogenic program, C/EBP alpha is required for establishment of insulin-sensitive glucose transport.