Primary nonalcoholic fatty liver disease is one of the most common forms of chronic liver diseases and is associated with insulin‐resistant states such as diabetes and obesity. Recent work has revealed potential implications of peroxisome proliferator‐activated receptor‐δ (PPARδ) in lipid homeostasis and insulin resistance. In this study, we examined the effect of PPARδ on sterol regulatory element‐binding protein‐1 (SREBP‐1), a pivotal transcription factor controlling lipogenesis in hepatocytes. Treatment with GW0742, the PPARδ agonist, or overexpression of PPARδ markedly reduced intracellular lipid accumulation. GW0742 and PPARδ overexpression in hepatocytes induced the expression of insulin‐induced gene‐1 (Insig‐1), an endoplasmic reticulum protein braking SREBP activation, at both the mRNA and the protein levels. PPARδ inhibited the proteolytic processing of SREBP‐1 into the mature active form, thereby suppressing the expression of the lipogenic genes fatty acid synthase, stearyl CoA desaturase‐1, and acetyl coenzyme A carboxylase. Our results revealed a direct binding of PPARδ to a noncanonical peroxisome proliferator responsive element motif upstream of the transcription initiation site of human Insig‐1. The disruption of this site diminished the induction of Insig‐1, which suggested that Insig‐1 is a direct PPARδ target gene in hepatocytes. Knockdown of endogenous Insig‐1 attenuated the suppressive effect of GW0742 on SREBP‐1 and its target genes, indicating PPARδ inhibited SREBP‐1 activation via induction of Insig‐1. Furthermore, overexpression of PPARδ by intravenous infection with the PPARδ adenovirus induced the expression of Insig‐1, suppressed SREBP‐1 activation, and, consequently, ameliorated hepatic steatosis in obese db/db mice. Conclusion: Our study reveals a novel mechanism by which PPARδ regulates lipogenesis, suggesting potential therapeutic applications of PPARδ modulators in obesity and type 2 diabetes, as well as related steatotic liver diseases. (HEPATOLOGY 2008.)