The proliferator-activated receptor gamma (PPAR gamma), a member of the nuclear receptor superfamily, is one of the most extensively studied ligand-inducible transcription factors. Since its identification in the early 1990s, PPAR gamma is best known for its critical role in adipocyte differentiation, maintenance, and function. Emerging evidence indicates that PPAR gamma is also important for the maturation and function of various immune system-related cell types, such as monocytes/macrophages, dendritic cells, and lymphocytes. Furthermore, PPAR gamma controls cell proliferation in various other tissues and organs, including colon, breast, prostate, and bladder, and dysregulation of PPAR gamma signaling is linked to tumor development in these organs. Recent studies have shed new light on PPAR gamma (dys)function in these three biological settings, showing unified and diverse mechanisms of action. Classical transactivation-where PPAR gamma activates genes upon binding to PPAR response elements as a heterodimer with RXR alpha-is important in all three settings, as underscored by natural loss-of-function mutations in FPLD3 and loss- and gain-of-function mutations in tumors. Transrepression-where PPAR gamma alters gene expression independent of DNA binding-is particularly relevant in immune cells. Interestingly, gene translocations resulting in fusion of PPAR gamma with other gene products, which are unique to specific carcinomas, present a third mode of action, as they potentially alter PPAR gamma's target gene profile. Improved understanding of the molecular mechanism underlying PPAR gamma activity in the complex regulatory networks in metabolism, cancer, and inflammation may help to define novel potential therapeutic strategies for prevention and treatment of obesity, diabetes, or cancer.