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The peroxisome proliferator-activated receptor gamma (PPARgamma) controls adipogenesis and metabolism. We demonstrate here that the absence of PPARgamma in fat has potent osteogenic activities, which affect haematopoiesis. The congenital absence of PPARgamma in fat of lipodystrophic PPARgamma(hyp/hyp) mice, strongly enhanced bone mass and consequentially reduced the bone-marrow cavity. Consistent with this, PPARgamma(hyp/hyp) mice had a significant decrease in bone marrow cellularity and resorted to extramedullary haematopoiesis in the spleen to maintain haematopoiesis. Our data indicate that antagonizing PPARgamma activity in fat could be an effective way to combat osteoporosis and suggest that haematopoietic function should be scrutinized in lipodystrophic subjects.