Protease inhibitors used in the treatment of HIV infection have been causally associated with lipodystrophy and insulin resistance and were shown to alter adipocyte differentiation in cultured cells. We aimed to delineate the mechanism by which indinavir impaired adipocyte function. We report that indinavir altered neither the growth nor insulin sensitivity of 3T3-F442A preadipocytes, nor did it alter the initial step of their differentiation, i.e., clonal proliferation. However, adipose conversion was inhibited by indinavir (by 50–60%), as shown by 1) the decrease in the number of newly formed adipocytes; 2) the lower level of the adipogenic protein markers, sterol regulatory element-binding protein-1 (SREBP-1), peroxisome proliferator–activated receptor-γ (PPAR-γ), and the insulin receptor (IR); and 3) the lack of SREBP-1 and PPAR-γ immunoreactivity in the nucleus of most indinavir-treated cells. Partial adipose conversion also correlated with an accumulation of SREBP-1 at the nuclear periphery and an alteration in its electrophoretic mobility. Defective expression and nuclear localization of PPAR-γ probably resulted from the decreased level of nuclear SREBP-1. Indinavir also rendered 3T3-F442A adipocytes resistant to insulin for mitogen-activated protein kinase activation at a step distal to IR substrate-1 tyrosine phosphorylation. Hence, indinavir impairs differentiation at an early step of adipose conversion probably involving the process controlling SREBP-1 intranuclear localization.