Insulin-induced gene 1 (INSIG-1) is a key regulator in the processing of the sterol regulatory element-binding proteins (SREBPs). We demonstrated that Insig-1 is regulated by peroxisome proliferator-activated receptor gamma (PPARgamma) providing a link between insulin sensitization/glucose homeostasis and lipid homeostasis. Insig-1 was identified as a PPARgamma target gene using microarray analysis of mRNA from the white adipose tissue of diabetic (db/db) animals treated with PPARgamma agonists. Insig-1 was induced in subcutaneous (9-fold) and epididymal (4-fold) fat pads from db/db mice treated for 8 days with the PPARgamma agonist rosiglitazone (30 mg/kg/day). This in vivo response was confirmed in differentiated C3H10T1/2 adipocytes treated with rosiglitazone. To elucidate the molecular mechanisms regulating INSIG-1 expression, we cloned and characterized the human INSIG-1 promoter. Co-expression of PPARgamma and RXRalpha transactivated the INSIG-1 promoter in the presence of PPARgamma agonists. This induction was attenuated when a dominant negative PPARgamma construct was transfected into cells. Furthermore, a PPARgamma antagonist repressed the transactivation of the INSIG-1 promoter-reporter construct. Truncations of the promoter resulted in the identification of a PPAR response element that mediated the regulation of the promoter. We demonstrated with recombinant proteins that the PPARgamma/RXRalpha heterodimer binds directly to this PPAR response element. In addition to regulation by PPARgamma/RXRalpha, we demonstrated that the INSIG-1 promoter is regulated by transcriptionally active SREBP. The sterol response element was identified 380 base pairs upstream of the transcriptional start site. These findings suggest that the regulation of Insig-1 by PPARgamma agonists could in turn regulate SREBP processing and thus couple insulin sensitizers with the regulation of lipid homeostasis.