Differentiation of adipocytes from preadipocytes contributes to adipose tissue expansion in obesity. Impaired adipogenesis may underlie the development of metabolic diseases such as insulin resistance and type 2 diabetes. Mechanistically, a well defined transcriptional network coordinates adipocyte differentiation. The family of paired-related homeobox transcription factors, which includes Prrx1a, Prrx1b, and Prrx2, is implicated with regulation of mesenchymal cell fate, including myogenesis and skeletogenesis; however, whether these proteins impact adipogenesis remains to be addressed. In this study, we identify Prrx1a and Prrx1b as negative regulators of adipogenesis. We show that Prrx1a and Prrx1b are down-regulated during adipogenesis in vitro and in vivo. Stable knockdown of Prrx1a/b enhances adipogenesis, with increased expression of peroxisome proliferator-activated receptor-γ, CCAAT/enhancer-binding protein-α and FABP4 and increased secretion of the adipokines adiponectin and chemerin. Although stable low-level expression of Prrx1a, Prrx1b, or Prrx2 does not affect 3T3-L1 adipogenesis, transient overexpression of Prrx1a or Prrx1b inhibits peroxisome proliferator-activated receptor-γ activity. Prrx1 knockdown decreases expression of Tgfb2 and Tgfb3, and inhibition of TGFβ signaling during adipogenesis mimics the effects of Prrx1 knockdown. These data support the hypothesis that endogenous Prrx1 restrains adipogenesis by regulating expression of TGFβ ligands and thereby activating TGFβ signaling. Finally, we find that expression of Prrx1a or Prrx1b in adipose tissue increases during obesity and strongly correlates with Tgfb3 expression in BL6 mice. These observations suggest that increased Prrx1 expression may promote TGFβ activity in adipose tissue and thereby contribute to aberrant adipocyte function during obesity.