The TRAP (thyroid hormone receptor-associated proteins) transcription coactivator complex (also known as Mediator) was first isolated as a group of proteins that facilitate the function of the thyroid hormone receptor. This complex interacts physically with several nuclear receptors through the TRAP220 subunit, and with diverse activators through other subunits. TRAP220 has been reported to show ligand-enhanced interaction with peroxisome proliferator-activated receptor gamma(2) (PPAR gamma(2)), a nuclear receptor essential for adipogenesis. Here we show that Trap220(-/-) fibroblasts are refractory to PPAR gamma(2)-stimulated adipogenesis, but not to MyoD-stimulated myogenesis, and do not express adipogenesis markers or PPAR gamma(2) target genes. These defects can be restored by expression of exogenous TRAP220. Further indicative of a direct role for TRAP220 in PPAR gamma(2) function via the TRAP complex, TRAP functions directly as a transcriptional coactivator for PPAR gamma(2) in a purified in vitro system and interacts with PPAR gamma(2) in a ligand- and TRAP220-dependent manner. These data indicate that TRAP220 acts, via the TRAP complex, as a PPAR gamma(2)-selective coactivator and, accordingly, that it is specific for one fibroblast differentiation pathway (adipogenesis) relative to another (myogenesis).