The forkhead factor Foxo1 (or FKHR) was identified in a yeast two-hybrid screen as a peroxisome proliferator-activated receptor (PPAR) gamma-interacting protein. Foxo1 antagonized PPARgamma activity and vice versa indicating that these transcription factors functionally interact in a reciprocal antagonistic manner. One mechanism by which Foxo1 antagonizes PPARgamma activity is through disruption of DNA binding as Foxo1 inhibited the DNA binding activity of a PPARgamma/retinoid X receptor alpha heterodimeric complex. The Caenorhabditis elegans nuclear hormone receptor, DAF-12, interacted with the C. elegans forkhead factor, DAF-16, paralleling the interaction between PPARgamma and Foxo1. daf-12 and daf-16 have been implicated in C. elegans insulin-like signaling pathways, and PPARgamma and Foxo1 likewise have been linked to mammalian insulin signaling pathways. These results suggest a convergence of PPARgamma and Foxo1 signaling that may play a role in insulin action and the insulinomimetic properties of PPARgamma ligands. A more general convergence of nuclear hormone receptor and forkhead factor pathways may be important for multiple biological processes and this convergence may be evolutionarily conserved.