When grown in the presence of serum with added insulin, Chinese hamster embryonic fibroblasts (CHEF/18) cells can be induced to become preadipocytes that are committed to the adipocyte pathway of terminal differentiation (Sager, R., and P. Kovac, 1982, Proc. Natl. Acad. Sci. USA, 79:480-484). We found that commitment to the adipocyte pathway, as well as terminal differentiation to form mature adipocytes, can occur in a defined serum-free medium containing insulin. When CHEF/18 cells are plated in serum-containing medium, only 5-10% of cells in each colony undergo terminal differentiation, whereas in serum-free medium, greater than 90% of the cells became adipocytes. These and other results show that CHEF/18 cells require no adipogenic factors in addition to insulin and the other components of the serum-free medium (transferrin, epithelial growth factor, thrombin) to form adipocytes, and furthermore, that serum inhibits the rate of terminal adipocyte differentiation of these cells. As little as 10 ng/ml insulin added to serum-containing medium can induce adipogenesis, suggesting that insulin rather than an insulinlike growth factor is the active agent. The results further demonstrate that virtually every CHEF/18 cell can be induced into the adipocyte pathway.