Obesity with enlarged fat cells is associated with high local concentrations of interleukin-6 (IL-6) and tumor necrosis factor alpha (TNFalpha) in the adipose tissue. We examined the effects of this inflammatory state on 3T3-L1 preadipocyte development and differentiation to mature adipose cells. Both IL-6 and TNFalpha impaired the normal differentiation pattern and lipid accumulation. However, IL-6 allowed a normal early induction of differentiation with inhibition of Wnt10b and Pref-1, whereas expression of CCAAT/enhancer-binding protein alpha, in contrast to peroxisome proliferator-activated receptor gamma, was markedly reduced. TNFalpha also allowed a normal early induction of differentiation, whereas the terminal differentiation to adipose cells was completely prevented. However, both cytokines induced an inflammatory phenotype of the cells but with different profiles. Remarkably, both IL-6 and TNFalpha maintained and augmented the canonical Wnt signaling associated with low axin and high low density lipoprotein receptor-related protein (LRD), Dishevelled, and beta-catenin levels. TNFalpha, but not IL-6, activated Wnt10b expression, whereas IL-6 increased the apparent phosphorylation of Dishevelled. Thus, both IL-6 and TNFalpha prevent the normal development of preadipocytes to fully differentiated adipose cells and, instead, promote an inflammatory phenotype of the adipocytes. These results provide an explanation as to why obesity and diabetes are associated with both local and systemic inflammation, insulin resistance, and ectopic lipid accumulation.