The peroxisome proliferator-activated receptor γ (PPARγ), a member of the nuclear receptor superfamily, is a key regulator of adipogenesis and is important for the homeostasis of the adipose tissue. The β-O-linked N-acetylglucosamine (O-GlcNAc) modification, a posttranslational modification on various nuclear and cytoplasmic proteins, is involved in the regulation of protein function. Here, we report that PPARγ is modified by O-GlcNAc in 3T3-L1 adipocytes. Mass spectrometric analysis and mutant studies revealed that the threonine 54 of the N-terminal AF-1 domain of PPARγ is the major O-GlcNAc site. Transcriptional activity of wild type PPARγ was decreased 30% by treatment with the specific O-GlcNAcase (OGA) inhibitor, but the T54A mutant of PPARγ did not respond to inhibitor treatment. In 3T3-L1 cells, an increase in O-GlcNAc modification by OGA inhibitor reduced PPARγ transcriptional activity and terminal adipocyte differentiation. Our results suggest that the O-GlcNAc state of PPARγ influences its transcriptional activity and is involved in adipocyte differentiation.