The gamma isoform of the peroxisome proliferator-activated receptor, PPAR gamma, regulates adipocyte differentiation and has recently been shown to be expressed in neoplasia of the colon and other tissues. We have found four somatic PPAR gamma mutations among 55 sporadic colon cancers: one nonsense, one frameshift, and two missense mutations. Each greatly impaired the function of the protein. c.472delA results in deletion of the entire ligand binding domain. Q286P and K319X retain a total or partial ligand binding domain but lose the ability to activate transcription through a failure to bind to ligands. R288H showed a normal response to synthetic ligands but greatly decreased transcription and binding when exposed to natural ligands. These data indicate that colon cancer in humans is associated with loss-of-function mutations in PPAR gamma.