The breakdown of stored fat deposits into its components is a highly regulated process that maintains plasma levels of free fatty acids to supply energy to cells. Insulin-mediated transcription of Atgl, the enzyme that mediates the rate-limiting step in lipolysis, is a key point of this regulation. Under conditions such as obesity or insulin resistance, Atgl transcription is often misregulated, which can contribute to overall disease progression. The mechanisms by which Atgl is induced during adipogenesis are not fully understood. We utilized computational approaches to identify putative transcriptional regulatory elements in Atgl and then tested the effect of these elements and the transcription factors that bind to them in cultured preadipocytes and mature adipocytes. Here we report that Atgl is down-regulated by the basal transcription factor Sp1 in preadipocytes and that the magnitude of down-regulation depends on interactions between Sp1 and peroxisome proliferator-activated receptor γ (PPARγ). In mature adipocytes, when PPARγ is abundant, PPARγ abrogated transcriptional repression by Sp1 at the Atgl promoter and up-regulated Atgl mRNA expression. Targeting the PPARγ- Sp1 interaction could be a potential therapeutic strategy to restore insulin sensitivity by modulating Atgl levels in adipocytes. © 2017 by The American Society for Biochemistry and Molecular Biology, Inc.