Recently, hepatic peroxisome proliferator-activated receptor (PPAR)γ has been implicated in hepatic lipid accumulation. We found that the C3H mouse strain does not express PPARγ in the liver and, when subject to a high-fat diet, is resistant to hepatic steatosis, compared with C57BL/6 (B6) mice. Adenoviral PPARγ2 injection into B6 and C3H mice caused hepatic steatosis, and microarray analysis demonstrated that hepatic PPARγ2 expression is associated with genes involved in fatty acid transport and the triglyceride synthesis pathway. In particular, hepatic PPARγ2 expression significantly increased the expression of monoacylglycerol O-acyltransferase 1 (MGAT1). Promoter analysis by luciferase assay and electrophoretic mobility shift assay as well as chromatin immunoprecipitation assay revealed that PPARγ2 directly regulates the MGAT1 promoter activity. The MGAT1 overexpression in cultured hepatocytes enhanced triglyceride synthesis without an increase of PPARγ expression. Importantly, knockdown of MGAT1 in the liver significantly reduced hepatic steatosis in 12-wk-old high-fat–fed mice as well as ob/ob mice, accompanied by weight loss and improved glucose tolerance. These results suggest that the MGAT1 pathway induced by hepatic PPARγ is critically important in the development of hepatic steatosis during diet-induced obesity.