We previously identified the small molecule harmine as a regulator of peroxisome proliferator activated-receptor gamma (PPARgamma) and adipocyte differentiation. In an effort to identify signaling pathways mediating harmine's effects, we performed transcriptional profiling of 3T3-F442A preadipocytes. Inhibitor of DNA biding 2 (Id2) was identified as a gene rapidly induced by harmine but not by PPARgamma agonists. Id2 is also induced in 3T3-L1 preadipocytes treated with dexamethasone, 3-isobutyl-1-methylxanthine, and insulin, suggesting that Id2 regulation is a common feature of the adipogenic program. Stable overexpression of Id2 in preadipocytes promotes expression of PPARgamma and enhances morphological differentiation and lipid accumulation. Conversely, small interfering RNA-mediated knockdown of Id2 antagonizes adipocyte differentiation. Mice lacking Id2 expression display reduced adiposity, and embryonic fibroblasts derived from these mice exhibit reduced PPARgamma expression and a diminished capacity for adipocyte differentiation. Finally, Id2 expression is elevated in adipose tissues of obese mice and humans. These results outline a role for Id2 in the modulation of PPARgamma expression and adipogenesis and underscore the utility of adipogenic small molecules as tools to dissect adipocyte biology.