This study identifies a molecular pathway by which PPARγ represses the transcriptional activation of inflammatory response genes in macrophages. The initial step involves ligand-dependent sumoylation of the PPARγ ligand-binding domain, which targets PPARγ to nuclear receptor co-repressor (NCoR)/histone deacetylase-3 (HDAC3) complexes on inflammatory gene promoters. This prevents the recruitment of the ubiquitylation/19S proteosome machinery, maintaining NCoR complexes on the promoter and keeping target genes in a repressed state. The mechanism explains how an agonist-bound nuclear receptor can be converted from an activator to a promoter-specific repressor of NF-κB target genes. The study also reveals that PIAS1, a SUMO E3 ligase, interacts with PPARγ and is required for its transrepressive activity. Sumoylation of PPARγ at K365, but not K77, is essential for transrepression and recruitment to the iNOS promoter. The findings provide insights into how PPARγ can switch from an activator to a repressor and suggest potential therapeutic targets for inflammatory and metabolic diseases.This study identifies a molecular pathway by which PPARγ represses the transcriptional activation of inflammatory response genes in macrophages. The initial step involves ligand-dependent sumoylation of the PPARγ ligand-binding domain, which targets PPARγ to nuclear receptor co-repressor (NCoR)/histone deacetylase-3 (HDAC3) complexes on inflammatory gene promoters. This prevents the recruitment of the ubiquitylation/19S proteosome machinery, maintaining NCoR complexes on the promoter and keeping target genes in a repressed state. The mechanism explains how an agonist-bound nuclear receptor can be converted from an activator to a promoter-specific repressor of NF-κB target genes. The study also reveals that PIAS1, a SUMO E3 ligase, interacts with PPARγ and is required for its transrepressive activity. Sumoylation of PPARγ at K365, but not K77, is essential for transrepression and recruitment to the iNOS promoter. The findings provide insights into how PPARγ can switch from an activator to a repressor and suggest potential therapeutic targets for inflammatory and metabolic diseases.