Diminished activity of peroxisome proliferator-activated receptor gamma (PPARgamma) is implicated in activation of hepatic stellate cells (HSC), a critical event in the development of liver fibrosis. In the present study, we investigated PPARgamma regulation by TNF-alpha in an HSC line designated as BSC. In BSC, TNF-alpha decreased both basal and ligand (GW1929)-induced PPARgamma mRNA levels without changing its protein expression. Nuclear extracts from BSC treated with TNF-alpha showed decreased binding of PPARgamma to PPAR-responsive element (PPRE) as determined by electrophoretic mobility shift assay. In BSC transiently transfected with a PPARgamma1 expression vector and a PPRE-luciferase reporter gene, TNF-alpha decreased both basal and GW1929-induced transactivation of the PPRE promoter. TNF-alpha increased activation of ERK1/2 and JNK, previously implicated in phosphorylation of Ser(82) of PPARgamma1 and resultant negative regulation of PPARgamma transactivity. In fact, TNF-alpha failed to inhibit transactivity of a Ser(82)Ala PPARgamma1 mutant in BSC. TNF-alpha-mediated inhibition of PPARgamma transactivity was not blocked with a Ser(32)Ala/Ser(36)Ala mutant of inhibitory NF-kappaBalpha (IkappaBalpha). These results suggest that TNF-alpha inhibits PPARgamma transactivity in cultured HSC, at least in part, by diminished PPARgamma-PPRE (DNA) binding and ERK1/2-mediated phosphorylation of Ser(82) of PPARgamma1, but not via the NF-kappaB pathway.