The ligand-activated transcription factor peroxisome proliferator activated receptor gamma (PPARgamma) is expressed in vascular endothelium where it exerts anti-inflammatory and antioxidant effects. However, its role in regulating vascular function remains undefined. We examined endothelial function in transgenic mice expressing dominant-negative mutants of PPARgamma under the control of an endothelial-specific promoter to test the hypothesis that endothelial PPARgamma plays a protective role in the vasculature. Under baseline conditions, responses to the endothelium-dependent agonist acetylcholine were not affected in either aorta or the basilar artery in vitro. In response to feeding a high-fat diet for 12 weeks, acetylcholine produced dilation that was markedly impaired in the basilar artery of mice expressing dominant-negative mutants, but not in mice expressing wild-type PPARgamma controlled by the same promoter. Unlike basilar artery, 12 weeks of a high-fat diet was not sufficient to cause endothelial dysfunction in the aorta of mice expressing dominant-negative PPARgamma, although aortic dysfunction became evident after 25 weeks. The responses to acetylcholine in basilar artery were restored to normal after treatment with a scavenger of superoxide. Baseline blood pressure was only slightly elevated in the transgenic mice, but the pressor response to angiotensin II was augmented. Thus, interference with PPARgamma in the endothelium produces endothelial dysfunction in the cerebral circulation through a mechanism involving oxidative stress. Consistent with its role as a fatty acid sensor, these findings provide genetic evidence that endothelial PPARgamma plays a critical role in protecting blood vessels in response to a high-fat diet.