We previously identified the small molecule harmine as a regulator of peroxisome proliferator activated-receptor (PPAR) and adipocyte differentiation. In an effort to identify signaling pathways mediating harmine's effects, we performed transcriptional profiling of 3T3-F442A preadipocytes. Inhibitor of DNA biding 2 (Id2) was identified as a gene rapidly induced by harmine but not by PPAR agonists. Id2 is also induced in 3T3-L1 preadipocytes treated with dexamethasone, IBMX and insulin, suggesting that Id2 regulation is a common feature of the adipogenic program. Stable overexpression of Id2 in preadipocytes promotes expression of PPAR and enhances morphological differentiation and lipid accumulation. Conversely, siRNA-mediated knockdown of Id2 antagonizes adipocyte differentiation. Mice lacking Id2 expression display reduced adiposity and embryonic fibroblasts derived from these mice exhibit reduced PPAR expression and a diminished capacity for adipocyte differentiation. Finally, Id2 expression is elevated in adipose tissues of obese mice and humans. These results outline a role for Id2 in the modulation of PPAR expression and adipogenesis and underscore the utility of adipogenic small molecules as tools to dissect adipocyte biology.