SPARC (secreted protein acidic and rich in cysteine) modulates interactions between cells and extracellular matrix and is enriched in white adipose tissue. We have reported that SPARC-null mice accumulate significantly more fat than wild-type mice and maintain relatively high levels of serum leptin. We now show that SPARC inhibits adipogenesis in vitro. Specifically, recombinant SPARC inhibited (a) adipocyte differentiation of stromal-vascular cells isolated from murine white adipose tissue and (b) the expression of adipogenic transcription factors and adipocyte-specific genes. SPARC induced the accumulation and nuclear translocation of beta-catenin and subsequently enhanced the interaction of beta-catenin and T cell/lymphoid enhancer factor 1. The activity of integrin-linked kinase was required for the effect of SPARC on beta-catenin accumulation as well as extracellular matrix remodeling. During adipogenesis, fusiform preadipocytes change into sphere-shaped adipocytes and convert the extracellular matrix from a fibronectin-rich stroma to a laminin-rich basal lamina. SPARC retarded the morphological changes exhibited by preadipocytes during differentiation. In the presence of SPARC, the deposition of fibronectin was enhanced, and that of laminin was inhibited; in parallel, the expression of alpha5 integrin was enhanced, and that of alpha6 integrin was inhibited. Lithium chloride, which enhances the accumulation of beta-catenin, also inhibited the expression of alpha6 integrin. These findings demonstrate a role for SPARC in adipocyte morphogenesis and in signaling processes leading to terminal differentiation.