The development of white adipose tissue involves both the hypertrophy of existing adipocytes and the proliferation and differentiation of preadipocytes. Adipogenic differentiation is inhibited by TGFβ signaling through Smad2/3, and IGF binding protein-3 (IGFBP-3) is also known to activate Smad2/3 signaling in some cell types. We previously reported that exogenous or overexpressed IGFBP-3 inhibits adipogenesis in 3T3-L1 cells, but the role of endogenous IGFBP-3 in this process, and its possible interaction with TGFβ, is not known. During 10-d adipogenic differentiation initiated by insulin, dexamethasone, and 3-isobutyl-1-methylxanthine, 3T3-L1 cells expressed increasing levels of IGFBP-3 and TGFβ1, secreting over 1000 pg/ml of both proteins. Exogenous recombinant human IGFBP-3 paralleled TGFβ1 in stimulating Smad2 phosphorylation in 3T3-L1 preadipocytes, but no additive effect was observed for the two agents. In contrast, knockdown of endogenous IGFBP-3 by small interfering RNA (siRNA) significantly impaired Smad2 activation by 0.25 ng/ml TGFβ1. Transient expression of human IGFBP-3 significantly inhibited the induction of adipogenic markers adiponectin and resistin, and the appearance of lipid droplets, but down-regulation of endogenous IGFBP-3 by siRNA had little effect on the expression of either marker during the 10-d differentiation, compared with nonsilencing control siRNA. However, down-regulation of endogenous IGFBP-3 using two different siRNA significantly reversed the inhibitory effect of TGFβ1 on both adiponectin and resistin induction. We conclude that IGFBP-3 activates inhibitory Smad signaling in 3T3-L1 cells and that endogenous IGFBP-3 modulates their adipogenic differentiation by regulating cell sensitivity towards the inhibitory effect of TGFβ.