Hormonal induction of growth-arrested 3T3-L1 preadipocytes triggers a signaling cascade that culminates in adipogenesis. CCAAT/enhancer-binding protein (C/EBP)β is expressed immediately but gains DNA-binding activity only after a long lag as the cells synchronously begin mitotic clonal expansion (MCE). After MCE, a process required for adipogenesis, C/EBP activates expression of C/EBPα and peroxisome proliferator-activated receptorγ, which then transcriptionally activate genes that produce the adipocyte phenotype. When mouse embryo fibroblasts (MEFs) are subjected to the same differentiation protocol, a subset of the MEFs undergoes a similar program of events. Similar to 3T3-L1 preadipocytes, the MEFs reenter the cell cycle (as indicated by the synchronous expression of cyclin A) and undergo MCE as evidenced by the incorporation of BrdUrd into DNA and the formation of mitotic foci of cells that undergo adipogenesis. C/EBPβ is expressed immediately after induction but exhibits delayed acquisition of DNAbinding activity followed by expression of adipocyte markers and the accumulation of cytoplasmic triglyceride. MEFs from C/EBPβ (-/-) mice, however, neither undergo MCE nor differentiate into adipocytes. Forced expression of C EBP (LAP) but not dominant-negative C/EBPβ (LIP) in C/EBPβ (-/-) MEFs restores MCE, expression of adipocyte markers, and the capacity to form mitotic foci of cells that undergo adipogenesis. These findings demonstrate that expression of C/EBPβ is a prerequisite for MCE in the adipocyte-differentiation program.