The nuclear receptor peroxisome-proliferation-activated receptor gamma (PPARγ), a transcriptional master regulator of glucose and lipid metabolism, inhibits the growth of several common cancers, including lung cancer. In this study, we show that the mechanism by which activation of PPARγ inhibits proliferation of lung cancer cells is based on metabolic changes. We found that treatment with the PPARγ agonist pioglitazone triggers a metabolic switch that inhibits pyruvate oxidation and reduces glutathione levels. These PPARγ-induced metabolic changes result in a marked increase of reactive oxygen species (ROS) levels that lead to rapid hypophosphorylation of retinoblastoma protein (RB) and cell-cycle arrest. The antiproliferative effect of PPARγ activation can be prevented by suppressing pyruvate dehydrogenase kinase 4 (PDK4) or β-oxidation of fatty acids in vitro and in vivo. Our proposed mechanism also suggests that metabolic changes can rapidly and directly inhibit cell-cycle progression of cancer cells by altering ROS levels.