Mouse 3T3-L1 fibroblasts, after attaining confluence, slowly differentiate functionally and morphologically into adipose cells. This conversion, characterized by a great accumulation of lipids, mostly triglycerides, is hastened by added insulin. The cells are relatively sensitive to the antiviral action of mouse fibroblast interferon (IF). Most cells treated with insulin in the presence of partially or highly purified interferon fail to differentiate. IF-treated cell cultures have far fewer adipose cells and much less lipid that replicate control cultures likewise stimulated to differentiate. The greatest differences are noted in the intracellular levels of triglycerides, cholesterol, and cholesterol esters, as well as in the incorporation of [14C]acetates into Folch-extractable lipids. Variously inactivated or mock IF preparations as well as several heterologous species interferons fail to inhibit 3T3-L1 differentiation. Thus, interferon appears to alter the program of events involved in the conversion of 3T3-L1 fibroblasts into adipose cells.