Accumulating evidence highlights intriguing interplays between circadian and metabolic pathways. We show that PER2 directly and specifically represses PPARγ, a nuclear receptor critical in adipogenesis, insulin sensitivity, and inflammatory response. PER2-deficient mice display altered lipid metabolism with drastic reduction of total triacylglycerol and nonesterified fatty acids. PER2 exerts its inhibitory function by blocking PPARγ recruitment to target promoters and thereby transcriptional activation. Whole-genome microarray profiling demonstrates that PER2 dictates the specificity of PPARγ transcriptional activity. Indeed, lack of PER2 results in enhanced adipocyte differentiation of cultured fibroblasts. PER2 targets S112 in PPARγ, a residue whose mutation has been associated with altered lipid metabolism. Lipidomic profiling demonstrates that PER2 is necessary for normal lipid metabolism in white adipocyte tissue. Our findings support a scenario in which PER2 controls the proadipogenic activity of PPARγ by operating as its natural modulator, thereby revealing potential avenues of pharmacological and therapeutic intervention.