Skeletal muscle and adipose tissue development often has a reciprocal relationship in vivo, particularly in myodystrophic states. We have investigated whether determined myoblasts with no inherent adipogenic potential can be induced to transdifferentiate into mature adipocytes by the ectopic expression of two adipogenic transcription factors, PPAR gamma and C/EBP alpha. When cultured under optimal conditions for muscle differentiation, murine G8 myoblasts expressing PPAR gamma and C/EBP alpha show markedly reduced levels of the myogenic basic helix-loop-helix proteins MyoD, myogenin, MRF4, and myf5 and are completely unable to differentiate into myotubes. Under conditions permissive for adipogenesis including a PPAR activator, these cells differentiate into mature adipocytes that express molecular markers characteristic of this lineage. Our results demonstrate that a developmental switch between these two related but highly specialized cell types can be controlled by the expression of key adipogenic transcription factors. These factors have an ability to inhibit myogenesis that is temporally and functionally separate from their ability to stimulate adipogenesis.