Adipose differentiation is a complex process controlled by a network of transcription factors and co-regulators. We compared the global gene expression patterns of adipogenic and nonadipogenic clones of 3T3-F442A preadipocytes and identified the transcriptional cofactor, vestigial-like 3 (Vgll3), as an inhibitor of adipogenesis. Vgll3 expression is down-regulated during terminal adipocyte differentiation in vitro and negatively correlates with weight and total fat mass in vivo. Furthermore, enforced Vgll3 expression inhibits the differentiation of preadipocytes in vitro, whereas shRNA-mediated knockdown of Vgll3 expression promotes differentiation. Expression of Vgll3 promoted the expression of genes associated with bone and chondrocyte formation, suggesting that Vgll3 participates in the decision of mesenchymal cells to proceed down the adipocyte, bone, or cartilage lineages. The elucidation of factors involved in specification of the adipocyte phenotype may aid in the identification of new strategies for the treatment of metabolic disease.