Activation of PPARgamma by synthetic ligands, such as thiazolidinediones, stimulates adipogenesis and improves insulin sensitivity. Although thiazolidinediones represent a major therapy for type 2 diabetes, conflicting studies showing that these agents can increase or decrease colonic tumors in mice have raised concerns about the role of PPARgamma in colon cancer. To analyze critically the role of this receptor, we have used mice heterozygous for Ppargamma with both chemical and genetic models of this malignancy. Heterozygous loss of PPARgamma causes an increase in beta-catenin levels and a greater incidence of colon cancer when animals are treated with azoxymethane. However, mice with preexisting damage to Apc, a regulator of beta-catenin, develop tumors in a manner insensitive to the status of PPARgamma. These data show that PPARgamma can suppress beta-catenin levels and colon carcinogenesis but only before damage to the APC/beta-catenin pathway. This finding suggests a potentially important use for PPARgamma ligands as chemopreventative agents in colon cancer.