Mouse 3T3-L1 preadipocytes differentiate into adipocytes when treated with 3-isobutyl-1-methylxanthine, dexamethasone, and insulin. Although mechanisms of adipogenesis, including transcriptional cascades, are understood, it is still unclear how clonally expanded cells eventually enter the terminal differentiation program. From gene expression profile studies, we identified G0/G1 switch gene 2 (G0s2) as a novel regulator of adipogenesis. The gene was found to be expressed at a higher level in white and brown adipose tissues, and it was induced in 3T3-L1 cells by hormonal treatment. Importantly, G0s2 expression was closely associated with the transition from mitotic clonal expansion to terminal differentiation. Knockdown of G0s2 expression with siRNA inhibited adipocyte differentiation, whereas constitutive overexpression of G0s2 accelerated differentiation of preadipocytes to mature adipocytes. Expression of G0s2 was found to be regulated by peroxisome proliferator-activated receptor γ (PPARγ), which is a well-known regulator of adipocyte differentiation. Absence of either PPARγ or G0s2 expression resulted in apoptotic pathway activation before terminal differentiation. To determine whether G0s2 has a role in vivo, G0s2-knockout mice were generated. The knockout mice were normal in appearance, but they had less adipose mass than wild-type littermates. Mouse embryonic fibroblast cells from G0s2-deficient mice exhibited impaired adipogenesis and contained unusually small intracellular lipid droplets, suggesting that G0s2 has a role in lipid droplet formation. Our studies demonstrate that G0s2 has an important role in adipogenesis and accumulation of triacylglycerol.