Previous study showed that mice lacking modulator recognition factor-2 (Mrf-2) were lean, with significant decreases in white adipose tissue. One postulated mechanism for the lean phenotype in Mrf-2 knockout mice is a defect in adipogenesis. In order to investigate this further, we examined the effects of Mrf-2 deficiency on adipogenesis in vitro. In mouse fibroblasts (MEFs) derived from Mrf-2(-/-) embryos, and in 3T3-L1 cells after knockdown of Mrf-2 by small interference RNA (siRNA) there was a potent inhibition of hormone-induced lipid accumulation, and significant decreases in the expression of the adipogenic transcription factors CCAAT/enhancer-binding protein (C/EBP) alpha and peroxisome proliferator-activated receptor-gamma and the mature adipocyte genes they control. Transduction of Mrf-2(-/-) MEFs with a retroviral vector expressing the longer Mrf-2 splice variant (Mrf-2B) stimulated both gene expression and lipid accumulation. Because 3T3-L1 cells are committed to the adipocyte lineage, we used this simpler model system to examine the effects of Mrf-2 deficiency on adipocyte maturation. Analyses of both mRNA and protein revealed that knockdown of Mrf-2 in 3T3-L1 cells prolonged the expression of C/EBP homologous protein-10, a dominant-negative form of C/EBP. Consistent with these findings, suppression of Mrf-2 also inhibited the DNA-binding activity of C/EBPbeta. These data suggest that Mrf-2 facilitates the induction of the two key adipogenic transcription factors C/EBPalpha and peroxisome proliferator-activated receptor-gamma indirectly by permitting hormone-mediated repression of the adipogenic repressor C/EBP homologous protein-10.