The antidiabetic thiazolidinediones, which include troglitazone and rosiglitazone, are ligands for the nuclear receptor peroxisome proliferator-activated receptor gamma (PPARgamma). Their antihyperglycemic effects seem to be linked to the regulation of PPARgamma-responsive genes. Here, we report the characterization of a specific PPARgamma antagonist that blocks several of the biological activities of the PPARgamma agonist rosiglitazone. PD068235 inhibited rosiglitazone-dependent PPARgamma transcriptional activity with an IC(50) of 0.8 microM and rosiglitazone-stimulated in vitro coactivator association. The role of PPARgamma in the initiation of differentiation is well documented. In this study, we used PD068235 as a tool to evaluate the functional role of PPARgamma in the maintenance of the terminally differentiated state. Treatment of confluent, growth-arrested 3T3-L1 preadipocytes with PD068235 blocked adipocyte differentiation induced by the standard adipogenic hormonal mixture (insulin/dexamethasone/isobutylmethylxanthin) and fully antagonized rosiglitazone-induced adipogenesis. In contrast, long-term treatment of terminally differentiated 3T3-L1 adipocytes with PD068235 did not induce any obvious morphological changes and had no effect on basal lipolysis rates. In addition, in fully differentiated adipocytes PD068235 did not alter the basal expression of PPARgamma target genes aP2 and CAP, but it effectively blocked rosiglitazone-induced expression of both genes. These results suggest that in terminally differentiated adipocytes, the PPARgamma activity is minimal and may not be required for the maintenance of PPARgamma target gene expression.