Protein inhibitor of activated STAT3 (PIAS3), a cytokine-induced repressor of signal transducer and activator of transcription 3 (STAT3) and a modulator of a broad array of nuclear proteins, is expressed in white adipose tissue, but its role in adipogenesis is not known. Here, we determined that PIAS3 was constitutively expressed in 3T3-L1 cells at all stages of adipogenesis. However, it translocated from the nucleus to the cytoplasm 4 days after induction of differentiation by isobutylmethylxanthine, dexamethasone, and insulin (MDI). In ob/ob mice, PIAS3 expression was increased in white adipose tissue depots compared to lean mice and was found in the cytoplasm of adipocytes. Overexpression of PIAS3 in differentiating preadipocytes, which localized primarily to the nucleus, inhibited mRNA level gene expression of adipogenic transcription factors C/EBPalpha and PPARgamma, as well as their downstream target genes aP2 and adiponectin. PIAS3 also inhibited C/EBPalpha promoter activation mediated specifically by insulin, but not dexamethasone or isobutylmethylxanthine. Taken together, these data suggest that PIAS3 may play an inhibitory role in adipogenesis by modulating insulin-activated transcriptional activation events. Increased PIAS3 expression in adipose tissue may play a role in the metabolic disturbances of obesity.