The retinoblastoma protein (RB) has previously been shown to facilitate adipocyte differentiation by inducing cell cycle arrest and enhancing the transactivation by the adipogenic CCAAT/enhancer binding proteins (C/EBP). We show here that the peroxisome proliferator-activated receptor gamma (PPARgamma), a nuclear receptor pivotal for adipogenesis, promotes adipocyte differentiation more efficiently in the absence of RB. PPARgamma and RB were shown to coimmunoprecipitate, and this PPARgamma-RB complex also contains the histone deacetylase HDAC3, thereby attenuating PPARgamma's capacity to drive gene expression and adipocyte differentiation. Dissociation of the PPARgamma-RB-HDAC3 complex by RB phosphorylation or by inhibition of HDAC activity stimulates adipocyte differentiation. These observations underscore an important function of both RB and HDAC3 in fine-tuning PPARgamma activity and adipocyte differentiation.