Lysophosphatidic acid (LPA) is an agonist for peroxisome proliferator activated receptor-γ (PPARγ). Although glycerol-3-phosphate acyltransferase-1 (GPAT1) esterifies glycerol-3-phosphate to form LPA, an intermediate in the de novo synthesis of glycerolipids, it has been assumed that LPA synthesized by this route does not have a signaling role. The availability of Chinese Hamster Ovary (CHO) cells that stably overexpress GPAT1, allowed us to analyze PPARγ activation in the presence of LPA produced as an intracellular intermediate. LPA levels in CHO-GPAT1 cells were 6-fold higher than in wild-type CHO cells, and the mRNA abundance of CD36, a PPARγ target, was 2-fold higher. Transactivation assays showed that PPARγ activity was higher in the cells that overexpressed GPAT1. PPARγ activity was enhanced further in CHO-GPAT1 cells treated with the PPARγ ligand troglitazone. Extracellular LPA, phosphatidic acid (PA) or a membrane-permeable diacylglycerol had no effect, showing that PPARγ had been activated by LPA generated intracellularly. Transient transfection of a vector expressing 1-acylglycerol-3-phosphate acyltransferase-2, which converts endogenous LPA to PA, markedly reduced PPARγ activity, as did over-expressing diacylglycerol kinase, which converts DAG to PA, indicating that PA could be a potent inhibitor of PPARγ. These data suggest that LPA synthesized via the glycerol-3-phosphate pathway can activate PPARγ and that intermediates of de novo glycerolipid synthesis regulate gene expression.