Peroxisome proliferator-activated receptor-γ (PPARγ) is a master regulator of adipogenesis and a target of the thiazolidinedione (TZD) class of antidiabetic drugs; therefore, identifying novel regulators of PPARγ action in adipocytes is essential for the future development of therapeutics for diabetes. MAGE family member D1 (MAGED1), by acting as an adaptor for ubiquitin-dependent degradation pathways and a co-factor for transcription, plays an important role in neural development, cell differentiation and circadian rhythm. Here, we showed that MAGED1 expression was downregulated during adipogenesis and loss of MAGED1 promoted preadipocyte proliferation and differentiation in vitro. MAGED1 bound to PPARγ and suppressed the stability and transcriptional activity of PPARγ. Compared to WT littermates, MAGED1-deficient mice showed increased levels of PPARγ protein and its target genes, more CD29+CD34+Sca-1+ adipocyte precursors and hyperplasia of white adipose tissues (WATs). Moreover, MAGED1-deficient mice developed late-onset obesity as a result of decreased energy expenditure and physical activity. However, these mice were metabolically healthy as shown by improved glucose clearance and insulin sensitivity, normal levels of serum lipids and enhanced secretion of adipokines such as leptin and adiponectin. Taken together, our data identify MAGED1 as a novel negative regulator of PPARγ activity, adipogenesis and insulin sensitivity in mice. MAGED1 might therefore serve as a novel pharmaceutical target to treat obesity-associated insulin resistance.