Ligands of peroxisome proliferator-activated receptor-γ (PPAR-γ) abrogate the stimulation of collagen gene transcription induced by transforming growth factor-beta (TGF-β). Here, we delineate the mechanisms underlying this important novel physiological function for PPAR-γ in connective tissue homeostasis. First, we demonstrated that antagonistic regulation of TGF-β activity by PPAR-γ ligands involves cellular PPAR-γ, since 15-deoxy-Δ12, 14-prostaglandin J 2 (15d-PGJ 2) failed to block TGF-β-induced responses in either primary cultures of PPAR-γ-null murine embryonic fibroblasts, or in normal human skin fibroblasts with RNAi-mediated knockdown of PPAR-γ. Next, we examined the molecular basis underlying the abrogation of TGF-β signaling by PPAR-γ in normal human fibroblasts in culture. The results demonstrated that Smad-dependent transcriptional responses were blocked by PPAR-γ without preventing Smad2/3 activation. In contrast, the interaction between activated Smad2/3 and the transcriptional coactivator and histone acetyltransferase p300 induced by TGF-β, and the accumulation of p300 on consensus Smad-binding DNA sequences and histone H4 hyperacetylation at the COL1A2 locus, were all prevented by PPAR-γ. Wild-type p300, but not a mutant form of p300 lacking functional histone acetyltransferase, was able to restore TGF-β-induced stimulation of COL1A2 in the presence of PPAR-γ ligands. Collectively, these results indicate that PPAR-γ blocked Smad-mediated transcriptional responses by preventing p300 recruitment and histone H4 hyperacetylation, resulting in the inhibition of TGF-β-induced collagen gene expression. Pharmacological activation of PPAR-γ thus may represent a novel therapeutic approach to target p300-dependent TGF-β profibrotic responses such as stimulation of collagen gene expression.—Ghosh, AK, Bhattacharyya, S., Wei, J., Kim, S., Barak, Y., Mori, Y., and Varga, J. Peroxisome proliferator-activated receptor-γ abrogates Smad-dependent collagen stimulation by targeting the p300 transcriptional coactivator.