Cyclic AMP (cAMP)-dependent processes are pivotal during the early stages of adipocyte differentiation. We show that exchange protein directly activated by cAMP (Epac), which functions as a guanine nucleotide exchange factor for the Ras-like GTPases Rap1 and Rap2, was required for cAMP-dependent stimulation of adipocyte differentiation. Epac, working via Rap, acted synergistically with cAMP-dependent protein kinase (protein kinase A [PKA]) to promote adipogenesis. The major role of PKA was to down-regulate Rho and Rho-kinase activity, rather than to enhance CREB phosphorylation. Suppression of Rho-kinase impaired proadipogenic insulin/insulin-like growth factor 1 signaling, which was restored by activation of Epac. This interplay between PKA and Epac-mediated processes not only provides novel insight into the initiation and tuning of adipocyte differentiation, but also demonstrates a new mechanism of cAMP signaling whereby cAMP uses both PKA and Epac to achieve an appropriate cellular response.Adipocytes are derived from multipotent mesenchymal stem cells in a process involving commitment to the adipocyte lineage followed by terminal differentiation of the committed preadipocytes. The process is regulated via complex interaction of external and internal clues, where cell shape and cytoskeletal tension converging on regulation of Rho and Rhokinase activity have been demonstrated to play pivotal roles (48,63). Whereas our understanding of the early steps of lineage determination still is limited, regulatory cascades controlling terminal adipocyte differentiation have been elucidated in great detail, particularly the sequential action of different transcription factors culminating in the expression of adipocyte-specific genes (25,30,58). Much information on terminal adipocyte differentiation has been obtained using model cell lines such as 3T3-L1 and 3T3-F442A or mouse embryo fibroblasts (MEFs). In both MEFs and 3T3-L1 preadipocytes, terminal differentiation is initiated upon treatment with fetal calf serum, glucocorticoids, and high levels of insulin or physiological concentrations of insulin-like growth factor 1 (IGF-1). Factors that increase cellular cyclic AMP (cAMP), such as isobutylmethylxanthine (IBMX) or forskolin, strongly accelerate the initiation of the differentiation program (for review, see references 25 and 45).Elevation of cellular cAMP concentration has been associated with crucial events in the early program of differentiation, such as suppression of Wnt10b (5) and Sp1 (64) and induction of CCAAT/enhancer-binding protein  (C/EBP) (10,29,70). Moreover, the transcriptional activity of peroxisome proliferator-activated receptor ␦ (PPAR␦) is regulated synergistically by ligands and cAMP (32). In addition, cAMP has been implicated in the production of endogenous PPAR␥ ligand(s) occurring during the initial stages of differentiation (46, 67). The cAMP-responsive element-binding protein (CREB) is a central transcriptional activator of the adipocyte differentiation program. Activated CREB induces expres...