Hormonal induction triggers a cascade leading to the expression of CCAAT/enhancer-binding protein(C/EBP)alpha and peroxisome proliferator-activated receptor (PPAR)gamma, C/EBP alpha, and PPAR gamma turns on series of adipocyte genes that give rise to the adipocyte phenotype. Previous findings indicate that C/EBP beta, a transcriptional activator of the C/EBP alpha and PPAR gamma genes, is rapidly expressed after induction, but lacks DNA-binding activity and therefore cannot activate transcription of the C/EBP alpha and PPAR gamma genes early in the differentiation program. Acquisition of DNA-binding activity of C/EBP beta occurs when CHOP-10, a dominant-negative form of C/EBP family members, is down-regulated and becomes hyperphosphorylated as preadipocytes traverse the G(1)-S checkpoint of mitotic clonal expansion. Evidences are presented in this report that lactacystin, a proteasome inhibitor, up-regulated the CHOP-10 expression, blocked the DNA-binding activity of C/EBP beta, and subsequently inhibited MCE as well as adipocyte differentiation. (c) 2006 Elsevier Inc. All rights reserved.