Peroxisome proliferator-activated receptor gamma (PPAR gamma) is considered to be a ligand-activated nuclear receptor with essential roles in adipogenesis, glucose and lipid homeostasis, and inflammatory responses. An unusually large ligand-binding pocket is a distinguishing feature of PPAR gamma and two related receptors, PPAR alpha and PPAR beta (also known as PPAR delta), which allows these receptors to interact with diverse chemical ligands including various fatty acids, fibrates, and the thiazolidinedione class of antidiabetic drugs. However, the physiologically relevant ligand of PPARs remains unknown. A PPAR gamma mutant that is incapable of binding ligands unexpectedly directed adipogenesis when introduced into fibroblasts. This raises key issues regarding the existence and roles of the hypothetical physiological ligands for PPAR gamma, issues that may also apply to other "orphan" nuclear receptors lacking bona fide ligands. Identification of the physiological ligands of PPARs and orphan nuclear receptors will be crucial for understanding the biology of these receptors.