Phosphoenolpyruvate carboxykinase (PEPCK) is expressed at high levels in liver, kidney, and adipose tissue. This enzyme catalyzes the rate-limiting step in hepatic and renal gluconeogenesis and adipose glyceroneogenesis. The regulatory factors important for adipose expression of the PEPCK gene are not well defined. Previous studies with transgenic mice established that the region between bp -2086 and -888 is required for expression in adipose tissue but not for expression in liver or kidney tissue. We show here that a DNA fragment containing this region can function as an enhancer and direct differentiation-dependent expression of a chloramphenicol acetyltransferase gene from a heterologous promoter in cultured 3T3-F442A preadipocytes and adipocytes. We further demonstrate that the adipocyte-specific transcription factor PPAR gamma 2, previously identified as a regulator of the adipocyte P2 enhancer, binds in a heterodimeric complex with RXR alpha to the PEPCK 5'-flanking region at two sites, termed PCK1 (bp -451 to -439) and PCK2 (bp -999 to -987). Forced expression of PPAR gamma 2 and RXR alpha activates the PEPCK enhancer in non-adipose cells. This activation is potentiated by peroxisome proliferators and fatty acids but not by 9-cis retinoic acid. Mutation of the PPAR gamma 2 binding site (PCK2) abolishes both the activity of the enhancer in adipocytes and its ability to be activated by PPAR gamma 2 and RXR alpha. These results establish a role for PPAR gamma 2 in the adipose expression of the PEPCK gene and suggest that this factor functions as a coordinate regulator of multiple adipocyte-specific genes.