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Insulinlike growth factor (IGF) I induces adipogenesis in vitro. IGF-binding protein 4 (IGFBP4) is highly expressed in adipocytes and osteoblasts and is inhibitory of IGFs in vitro. We previously reported that Igfbp4 null mice (Igfbp4-/-) had decreased fat proportions at 8 and 16 weeks of age. However, the mechanism leading to the reduced adiposity remains unknown. The purpose of this study was to elucidate how IGFBP4 mediates adipose tissue development in vivo. Our results showed that inguinal and gonadal white adipose tissue (gWAT) from Igfbp4-/- mice had decreased weights and Pparγ expression. Cultures of primary bone marrow stromal cells (BMSCs) and ear mesenchymal stem cells (eMSCs) from mutant mice showed reduced adipogenesis. Both BMSCs and eMSC had a strong induction of Igfbp4 expression during adipogenesis. Furthermore, the increase in phosphorylated Akt (p-Akt), a downstream target of IGF-I signaling, in wild-type cells, was blunted in mutant eMSCs. On a high-fat diet (HFD) there were sexual differences in adipocyte expansion of Igfbp4-/- mice. Mutant males gained weight by expanding their white fat depots. However, Igfbp4-/- female mice were protected against diet-induced obesity. Ovariectomized Igfbp4-/- female mice gained weight in a manner similar to that seen in ovariectomized controls. Thus, Igfbp4 is required for inguinal fat expansion in female mice but not in male mice. However, gWAT expansion, which is prevented by estrogen during HFD, does not require Igfbp4.