2,3,7,8-Tetrachlorodibenzo-p-dioxin (TCDD)-induced toxicity is particularly striking in adipose tissue, where it causes severe wasting. This phenomenon suggests that TCDD could have effects on adipocyte differentiation, now demonstrated using 3T3-L1 cells as a model system. When cells were treated with 10 nM TCDD before differentiation or during the first two days of induction in the presence of dexamethasone (dex) and isobutylmethylxanthine (IBMX), a reduction occurred in the number of fat cell colonies measured 7-10 days later by Oil Red O staining. Northern blotting showed an accompanying reduction in amounts of mRNA encoding several adipocyte markers. In contrast, when TCDD was added after differentiation, it had no effect on the maintenance of the adipose phenotype. Dose-response and structure-activity relationships were consistent with a process mediated by interaction of TCDD with the Ah receptor. The possibility that TCDD acts by inhibiting the signaling pathways activated by dex and IBMX was investigated. TCDD did not interfere with glucocorticoid-inducible transcription as judged by the unimpaired responsiveness of a transfected reporter construct. Treatment of cells with TCDD augmented the increase in protein kinase A (PKA) activity elicited by either IBMX or forskolin; therefore, if TCDD disrupts the cAMP signaling pathway, it must do so at a step after activation of PKA.