Recent studies have revealed that the calcium-dependent serine/threonine phosphatase calcineurin mediates the effects of intracellular calcium in many different cell types. In this study we investigated the role of calcineurin in the regulation of adipocyte differentiation. We found that the specific calcineurin inhibitors cyclosporin A and FK506 overcame the antiadipogenic effect of calcium ionophore on the differentiation of 3T3-L1 preadipocytes. This finding suggests that calcineurin is responsible for mediating the previously documented Ca(2+)-dependent inhibition of adipogenesis. We further demonstrate that the expression of a constitutively active calcineurin mutant potently inhibits the ability of 3T3-L1 cells to undergo adipocyte differentiation by preventing expression of the proadipogenic transcription factors peroxisome proliferator-activated receptor gamma (PPARgamma) and CCAAT/enhancer-binding protein alpha (C/EBPalpha). This calcineurin-mediated block in adipocyte differentiation is rescued by ectopic expression of PPARgamma1. Finally, we demonstrate that inhibition of endogenous calcineurin activity with either FK506 or a specific calcineurin inhibitory peptide enhances differentiation of 3T3-L1 cells in response to suboptimal adipogenic stimuli, suggesting that endogenous calcineurin activity normally sets a signaling threshold that antagonizes efficient adipocyte differentiation. Collectively, these data indicate that calcineurin acts as a Ca(2+)-dependent molecular switch that negatively regulates commitment to adipocyte differentiation by preventing the expression of critical proadipogenic transcription factors.