Peroxisome proliferator-activated receptor γ (PPARγ) is a ligand-activated nuclear receptor and a master regulator of adipogenesis. Microsomal prostaglandin E (PGE) synthase-1 (mPGES-1) is an inducible enzyme that couples with cyclooxygenase-2 for the biosynthesis of PGE2. In this study we demonstrate the existence of a coordinate functional interaction between PPARγ and mPGES-1 in controlling the process of pre-adipocyte differentiation in white adipose tissue (WAT). Adipocyte-specific PPARγ knock-out mice carrying an aP2 promoter-driven Cre recombinase transgene showed a blunted response to the adipogenic effects of a high fat diet. Pre-adipocytes from these knock-out mice showed loss of PPARγ and were resistant to rosiglitazone-induced WAT differentiation. In parallel, WAT from these mice showed increased expression of uncoupling protein 1, a mitochondrial enzyme that dissipates chemical energy as heat. Adipose tissue from mice lacking PPARγ also showed mPGES-1 up-regulation and increased PGE2 levels. In turn, PGE2 suppressed PPARγ expression and blocked rosiglitazone-induced pre-adipocyte differentiation toward white adipocytes while directly elevating uncoupling protein 1 expression and pre-adipocyte differentiation into mature beige/brite adipocytes. Consistently, pharmacological mPGES-1 inhibition directed pre-adipocyte differentiation toward white adipocytes while suppressing differentiation into beige/brite adipocytes. This browning effect was reproduced in knockdown experiments using a siRNA directed against mPGES-1. The effects of PGE2 on pre-adipocyte differentiation were not seen in mice lacking PPARγ in adipose tissue and were not mirrored by other eicosanoids (i.e. leukotriene B4). Taken together, these findings identify PGE2 as a key regulator of white-to-brown adipogenesis and suggest the existence of a coordinate regulation of adipogenesis between PPARγ and mPGES-1.