The signaling pathways imposing hormonal control over adipocyte differentiation are poorly understood. While insulin and Akt signaling have been found previously to be essential for adipogenesis, the relative importance of their many downstream branches have not been defined. One direct substrate that is inhibited by Akt-mediated phosphorylation is the tuberous sclerosis complex 2 (TSC2) protein, which associates with TSC1 and acts as a critical negative regulator of the mammalian target of rapamycin (mTOR) complex 1 (mTORC1). Loss of function of the TSC1-TSC2 complex results in constitutive mTORC1 signaling and, through mTORC1-dependent feedback mechanisms and loss of mTORC2 activity, leads to a concomitant block of Akt signaling to its other downstream targets. We find that, despite severe insulin resistance and the absence of Akt signaling, TSC2-deficient mouse embryo fibroblasts and 3T3-L1 pre-adipocytes display enhanced adipocyte differentiation that is dependent on the elevated mTORC1 activity in these cells. Activation of mTORC1 causes a robust increase in the mRNA and protein expression of peroxisome proliferator-activated receptor gamma (PPARgamma), which is the master transcriptional regulator of adipocyte differentiation. In examining the requirements for different Akt-mediated phosphorylation sites on TSC2, we find that only TSC2 mutants lacking all five previously identified Akt sites fully block insulin-stimulated mTORC1 signaling in reconstituted Tsc2 null cells, and this mutant also inhibits adipogenesis. Finally, renal angiomyolipomas from patients with tuberous sclerosis complex contain both adipose and smooth muscle-like components with activated mTORC1 signaling and elevated PPARgamma expression. This study demonstrates that activation of mTORC1 signaling is a critical step in adipocyte differentiation and identifies TSC2 as a primary target of Akt driving this process. Therefore, the TSC1-TSC2 complex regulates the differentiation of mesenchymal cell lineages, at least in part, through its control of mTORC1 activity and PPARgamma expression.