Inhibitor of DNA binding 4 (ID4) is a helix-loop-helix protein that heterodimerizes with basic helix-loop-helix transcription factors inhibiting their function. ID4 expression is important for adipogenic differentiation of the 3T3-L1 cell line, and inhibition of ID4 is associated with a concomitant decrease in CCAAT/enhancer-binding protein alpha and peroxisome proliferator-activated receptor gamma mRNA and protein expression. Mice with a homozygous deletion of Id4 (Id4(-/-)) have reduced body fat and gain much less weight compared with wild-type littermates when placed on diets with high fat content. Mouse embryonic fibroblasts (MEFs) isolated from Id4(-/-) mice have reduced adipogenic potential when compared with wild-type MEFs. In agreement with changes in morphological differentiation, the levels of CCAAT/enhancer-binding protein alpha and peroxisome proliferator-activated receptor gamma were also reduced in MEFs from Id4(-/-) mice. Our results demonstrate the importance of ID4 in adipocyte differentiation and the implications of this regulation for adipose tissue formation.