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Adipocyte differentiation of mouse embryonic fibroblasts (MEFs) derived from c-Src wild-type or c-Src-deficient (abbreviated as MEF+/+ and MEF−/− hereafter) C57BL/6 mice was induced by ascorbic acid (A) and β-glycerophosphate (G). TCDD clearly suppressed differentiation of MEF+/+, but not MEF−/−, as measured by increased accumulation of triglycerides associated with increased expression of adipocyte differentiation-specific genes such as peroxisome proliferators activated receptor (PPAR)γ, stearoyl-CoA desaturase (SCD-1). Studies on inducibility of TCDD-activated genes such as cytochrome P450 (CYP)1A1 and CYP1B1 revealed a comparable dose response in both MEF+/+ and MEF−/−. Furthermore, the binding activity of AhR complexes to xenobiotic response elements (XREs) was similar in both cell lines. We further studied the effect of TCDD on CCAAT/enhancer binding proteins (C/EBP), which are known to be important regulators of cell differentiation. TCDD induced C/EBPβ and C/EBPδ mRNA expression and DNA binding activity in a time- and dose-dependent manner in MEF+/+ but not in MEF−/−. The levels of C/EBPβ and C/EBPδ were still elevated in differentiated MEF+/+ after 10 days of treatment with TCDD. In MEF−/−, C/EBPβ and C/EBPδ are highly expressed constitutively. In contrast to MEF+/+, TCDD does not cause any significant change of these transcription factors in MEF−/−. These data indicate that suppression of differentiation by TCDD in MEF requires a functional c-Src activity and induced levels of C/EBPβ and C/EBPδ, including their maintenance at high levels by TCDD, rather than ultimate high levels of these C/EBP isoforms.