Adipose tissue has long been known to house the largest energy reserves in the animal body. Recent research indicates that in addition to this role, the adipocyte functions as a global regulator of energy metabolism. Adipose tissue is exquisitely sensitive to a variety of endocrine and paracrine signals, e.g. insulin, glucagon, glucocorticoids, and tumor necrosis factor (TNF), that combine to control both the secretion of other regulatory factors and the recruitment and differentiation of new adipocytes. The process of adipocyte differentiation is controlled by a cascade of transcription factors, most notably those of the C/EBP and PPAR families, which combine to regulate each other and to control the expression of adipocyte-specific genes. One such gene, i.e. the obese gene, was recently identified and found to encode a hormone, referred to as leptin, that plays a major role in the regulation of energy intake and expenditure. The hormonal and transcriptional control of adipocyte differentiation is discussed, as is the role of leptin and other factors secreted by the adipocyte that participate in the regulation of adipose homeostasis.