This study aimed to clone the peroxisome proliferator-activated receptor γ (PPARγ) gene of the Xuhuai goat and to make transgenic sheep using intratesticular injection, so as to improve the meat quality and flavor by increasing the intramuscular fat content. The coding sequence of the goat PPARγ gene was 1,428 bp, encoding 475 amino acids. Its similarity with other species was 81 (chicken), 89 (mouse), 92 (pig), 98 (cow), and 99% (sheep). The similarity of the corresponding amino acid sequences was 92.9, 97.3, 98.3, 99.6, and 99.8%, respectively. The signal peptide region of the PPARγ protein was not found in this study, demonstrating that the protein is not secreted. RT-PCR and western blot revealed that PPARγ was expressed in vitro, and the protein was localized in the cytoplasm. The PPARγ gene was expressed in F1 transgenic sheep at both the mRNA and the protein levels; the positive ratio was 13.7%.