Reversible phosphorylation is a widespread molecular mechanism to regulate the function of cellular proteins, including transcription factors. Phosphorylation of the nuclear receptor PPARγ (peroxisome-proliferator-activated receptor γ) at two conserved serine residue (Ser112 and Ser273) results in an altered transcriptional activity of this transcription factor. So far, only a very limited number of cellular enzymatic activities has been described which can dephosphorylate nuclear receptors. In the present study we used immunoprecipitation assays coupled to tandem MS analysis to identify novel PPARγ-regulating proteins. We identified the serine/threonine phosphatase PPM1B [PP (protein phosphatase), Mg2+/Mn2+ dependent, 1B; also known as PP2Cβ] as a novel PPARγ-interacting protein. Endogenous PPM1B protein is localized in the nucleus of mature 3T3-L1 adipocytes where it can bind to PPARγ. Furthermore we show that PPM1B can directly dephosphorylate PPARγ, both in intact cells and in vitro. In addition PPM1B increases PPARγ-mediated transcription via dephosphorylation of Ser112. Finally, we show that knockdown of PPM1B in 3T3-L1 adipocytes blunts the expression of some PPARγ target genes while leaving others unaltered. These findings qualify the phosphatase PPM1B as a novel selective modulator of PPARγ activity.