This study investigates the role of PPARγ, a key regulator of adipocyte differentiation, in bone metabolism. Homozygous PPARγ-deficient embryonic stem (ES) cells failed to differentiate into adipocytes but spontaneously differentiated into osteoblasts, which were restored by reintroduction of the PPARγ gene. Heterozygous PPARγ-deficient mice exhibited increased bone mass with enhanced osteoblastogenesis but normal osteoblast and osteoclast functions, and this effect was not mediated by insulin or leptin. The osteogenic effect of PPARγ haploinsufficiency became prominent with aging but was not affected by ovariectomy. PPARγ haploinsufficiency enhanced osteoblastogenesis in bone marrow cell cultures but did not affect differentiated osteoblasts or osteoclast-lineage cells. This study demonstrates that PPARγ-dependent regulation of bone metabolism, where PPARγ insufficiency increases bone mass by stimulating osteoblastogenesis from bone marrow progenitors.This study investigates the role of PPARγ, a key regulator of adipocyte differentiation, in bone metabolism. Homozygous PPARγ-deficient embryonic stem (ES) cells failed to differentiate into adipocytes but spontaneously differentiated into osteoblasts, which were restored by reintroduction of the PPARγ gene. Heterozygous PPARγ-deficient mice exhibited increased bone mass with enhanced osteoblastogenesis but normal osteoblast and osteoclast functions, and this effect was not mediated by insulin or leptin. The osteogenic effect of PPARγ haploinsufficiency became prominent with aging but was not affected by ovariectomy. PPARγ haploinsufficiency enhanced osteoblastogenesis in bone marrow cell cultures but did not affect differentiated osteoblasts or osteoclast-lineage cells. This study demonstrates that PPARγ-dependent regulation of bone metabolism, where PPARγ insufficiency increases bone mass by stimulating osteoblastogenesis from bone marrow progenitors.