A heterodimer of peroxisome proliferator-activated receptor gamma (PPAR gamma) and retinoid X receptor (RXR) is required for adipocyte differentiation. The gene encoding cytosolic phosphoenolpyruvate carboxykinase (PEPCK) is a PPAR gamma /RXR target gene in adipose tissue. Of the two PPAR gamma response elements, gAF1/PCK1 and PCK2, only PCK2 is required for PEPCK expression and responsiveness to the PPAR gamma agonist, rosiglitazone, in adipose tissue even though both elements bind PPAR gamma /RXR in vitro. In contrast, gAF1/PCK1 is essential for glucocorticoid inhibition of PPAR gamma -induced PEPCK gene expression in adipocytes. We report that chicken ovalbumin upstream promoter transcription factor II (COUP-TFII) is the predominant nuclear receptor bound to gAF1/PCK1 in preadipocytes. COUP-TFII declines during adipogenesis in reciprocal fashion to PPAR gamma. In transiently transfected fibroblasts COUP-TFII acts at gAF1/PCK1 to inhibit PPAR gamma /RXR activation via PCK2. In contrast COUP-TFs are transcriptional activators of PEPCK in hepatocytes. PPAR gamma /RXR occupies gAF1/PCK1 in adipocytes, and mutation of gAF1/PCK1 enhances PEPCK promoter transactivation by PPAR gamma /RXR in fibroblasts, suggesting that this element is also a negative PPAR gamma response element. These results indicate that gAF1/PCK1 is a pleiotropic element through which COUP-TFII inhibits premature PEPCK expression, and perhaps adipogenesis in general, and PPAR gamma /RXR uses this same element in adipocytes to participate in PEPCK modulation by glucocorticoids.