The transcription factor peroxisome proliferator-activated receptor-gamma (PPARgamma) plays an important role in regulating lipid and glucose metabolism and improves insulin sensitivity in diabetic patients when activated by thiazolidinedione drugs. Several loss-of-function mutations in PPARgamma have been identified that cause lipodystrophy and diabetes in humans. Because affected individuals are heterozygotes and have one normal PPARgamma allele, it is of interest to know whether these mutations act in a dominant-negative fashion to inhibit the activity of the wild-type (WT) receptor. Here we compare the molecular phenotypes of two previously identified PPARgamma mutations: P467L, reported to be dominant negative; and F388L, reported to be devoid of dominant-negative activity. We developed a competitive chromatin immunoprecipitation assay to measure the relative ability of mutant PPARgamma to compete with WT receptor for binding to a PPAR regulatory element (PPRE)-containing promoter. By determining the ratio of mutant and WT receptors bound to a PPRE over time, we estimated the relative promoter turnover rate of each receptor. This assay demonstrated that PPARgamma bearing the P467L had a reduced promoter turnover rate compared with the F388L receptor, and over time out-competed the WT receptor for promoter binding sites. We propose that the P467L receptor is dominant negative because in a cell containing both WT and mutant receptors, the majority of the PPAR-regulated promoters will be occupied by the transcriptionally defective mutant receptor. In contrast, the F388L mutation lacks dominant-negative activity because its more rapid promoter turnover rate prevented it from out-competing the WT receptor for promoter binding sites.