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