Interferon-gamma (IFN gamma) has been shown to decrease the expression of peroxisome proliferator activated receptor-gamma (PPAR gamma) in fat cells by blocking the synthesis and increasing the degradation of this transcription factor. Since IFN gamma is a potent activator of STAT 1, we searched for IFN gamma -sensitive binding sites in the PPAR gamma promotors. A region of the murine PPAR gamma2 promoter was identified that bound nuclear protein from adipocyte nuclei that had been acutely treated with IFN gamma. Supershift analysis revealed that STAT 1, and no other STATs present in the adipocyte nucleus, was capable of binding to this site within the PPAR gamma2 promoter. NIH 3T3 and 3T3-L1 cells were transiently transfected with a PPAR gamma2 promoter reporter construct, which contained the STAT 1 binding site. Treatment of these cells with IFN gamma resulted in a decrease in reporter activity, demonstrating the modulation of the PPAR-gamma2 promoter by IFN gamma. We also examined the ability of leukemia inhibitory factor (LIF) to regulate binding at this site. LIF, a potent activator of STAT3 and a weak activator of STAT I in these cells, resulted in some binding to the IFN gamma responsive element in the PPAR gamma2 promoter that was mediated by STAT 1. Therefore, we examined the ability of LIF to regulate PPAR gamma mRNA and observed that LIF, unlike IFN-gamma, had little effect on PPAR gamma expression. These results and our previous work suggest that cytokine induced STAT I homodimers modulate the transcriptional repression of PPAR gamma2 in adipocytes.