Purposes/Aim: Glucocorticoid steroids can induce expression of PPARg gene and enhance adipogenesis by bone marrow mesenchymal stem cells (BMSCs), which may result in osteonecrosis of the femoral head. Currently, there are no medications available to prevent steroid-induced osteonecrosis. We hypothesized that siRNA targeting PPARg gene may prevent steroid-induced adipogenesis and osteonecrosis in rabbit. The purpose of this study was to evaluate the preventive effects of siRNA targeting PPARg gene on steroid-induced adipogenesis and osteonecrosis. Methods: Forty-eight healthy New Zealand rabbits were randomized into four groups with Group M treated with dexamethasone only, Group S with dexamethasone and a recombinant adenovirus shuttle vector carrying siRNA targeting PPARg gene, Group Con with dexamethasone and a vector carrying irrelative sequence, and Group N with no treatment serving as control. Expressions of the PPARg, osteocalcin and Runx2 genes, as well as histopathologic changes were evaluated. Results: The levels of PPARg gene expression were decreased while the levels of osteocalcin and Runx2 gene expression were increased in rabbits treated with dexamethasone and recombinant adenovirus shuttle vector carrying siRNA targeting PPARg gene (Group S), compared to rabbits treated either with dexamethasone alone (Group M) or with both dexamethasone and a vector carrying irrelative sequence (Group Con). The marrow necrosis, adipocyte hypertrophy and proliferation, diminished hematopoiesis, thinner and sparse trabeculae, and increased empty osteocyte lacunae in the femoral head were observed in Group M and Group Con rabbits. However, no such changes were seen in Group S rabbits that were treated with dexamethasone and a recombinant adenovirus shuttle vector carrying siRNA targeting PPARg gene. Conclusion: siRNA targeting PPARg gene can inhibit adipogenic differentiation of BMSCs and prevent steroid-induced osteonecrosis in rabbit. The inhibition of bone-marrow adipogenesis and concomitant enhancement of osteogenesis with RNAi may provide a novel approach to the prevention of steroid-induced osteonecrosis.