PPARγ (peroxisome-proliferator-activated receptor γ) is a master transcription factor involved in adipogenesis through regulating adipocyte-specific gene expression. Recently, lipin1 was found to act as a key factor for adipocyte maturation and maintenance by modulating the C/EBPα (CCAAT/enhancer-binding protein α) and PPARγ network; however, the precise mechanism by which lipin1 affects the transcriptional activity of PPARγ is largely unknown. The results of the present study show that lipin1 activates PPARγ by releasing co-repressors, NCoR1 (nuclear receptor co-repressor 1) and SMRT (silencing mediator of retinoid and thyroid hormone receptor), from PPARγ in the absence of the ligand rosiglitazone. We also identified a novel lipin1 TAD (transcriptional activation domain), between residues 217 and 399, which is critical for the activation of PPARγ, but not PPARα. Furthermore, this TAD is unique to lipin1 since this region does not show any homology with the other lipin isoforms, lipin2 and lipin3. The activity of the lipin1 TAD is enhanced by p300 and SRC-1 (steroid receptor co-activator 1), but not by PCAF (p300/CBP-associated factor) and PGC-1α (PPAR co-activator 1α). The physical interaction between lipin1 and PPARγ occurs at the lipin1 C-terminal region from residues 825 to 926, and the VXXLL motif at residue 885 is critical for binding with and the activation of PPARγ. The action of lipin1 as a co-activator of PPARγ enhanced adipocyte differentiation; the TAD and VXXLL motif played critical roles, but the catalytic activity of lipin1 was not directly involved. Collectively, these data suggest that lipin1 functions as a key regulator of PPARγ activity through its ability to release co-repressors and recruit co-activators via a mechanism other than PPARα activation.