FTO (fat mass and obesity associated gene) was genetically identified to be associated with body mass index (BMI), presumably through functional regulation of energy homeostasis. However, the cellular and molecular mechanisms by which FTO functions remain largely unknown. Using 3T3-L1 preadipocyte as a model to study the role of FTO in adipogenesis, we demonstrated that FTO is functionally required for 3T3-L1 differentiation. FTO knock-down with siRNA inhibited preadipocyte differentiation, whereas ectopic over-expression of FTO enhanced the process. The demethylase activity of FTO is required for differentiation. Level of N6-methyladenosine (m6A) is decreased in cells over-expressing FTO. In contrast, overexpression of R96Q, a FTO missense mutant lack of demethylase activity, had no effect on cellular m6A level and impeded differentiation. Treatment with Rosiglitazone, a PPARγ agonist, could overcome the differentiation inhibition imposed by R96Q mutant, suggesting the effect of FTO is mediated through PPARγ.