Peroxisome proliferator-activated receptors (PPARs) are activated by a variety of fatty acids, eicosanoids, and hypolipidemic and insulin-sensitizing drugs. Many of these compounds bind avidly to members of a family of small lipid-binding proteins, the fatty acid-binding proteins (FABPs). Fatty acids are activated to CoA esters, which bind with high affinity to the acyl-CoA-binding protein (ACBP). Thus, the availability of known and potential PPAR ligands may be regulated by lipid-binding proteins. In this report we show by transient transfection of CV-1 cells that coexpression of ACBP and adipocyte lipid-binding protein (ALBP) exerts a ligand- and PPAR subtype-specific attenuation of PPAR-mediated trans-activation, suggesting that lipid-binding proteins, when expressed at high levels, may function as negative regulators of PPAR activation by certain ligands. Expression of ACBP, ALBP, and keratinocyte lipid-binding protein (KLBP) is induced during adipocyte differentiation, a process during which PPARgamma plays a prominent role. We present evidence that endogenous ACBP, ALBP, and KLBP not only localize to the cytoplasm but also exhibit a prominent nuclear localization in 3T3-L1 adipocytes. In addition, forced expression of ACBP, ALBP, and KLBP in CV-1 cells resulted in a substantial accumulation of all three proteins in the nucleus. These results suggest that lipid-binding proteins, contrary to the general assumption, may exert their action in the nucleus as well as in the cytoplasm.