The transcriptional factor FoxO1 plays an important role in metabolic homeostasis. Herein we identify a novel transrepressional function that converts FoxO1 from an activator of transcription to a promoter-specific repressor of peroxisome proliferator-activated receptor gamma (PPARgamma) target genes that regulate adipocyte biology. FoxO1 transrepresses PPARgamma via direct protein-protein interactions; it is recruited to PPAR response elements (PPRE) on PPARgamma target genes by PPARgamma bound to PPRE and interferes with promoter DNA occupancy of the receptor. The FoxO1 transrepressional function, which is independent and dissectible from the transactivational effects, does not require a functional FoxO1 DNA binding domain, but dose require an evolutionally conserved 31 amino acids LXXLL-containing domain. Insulin induces FoxO1 phosphorylation and nuclear exportation, which prevents FoxO1-PPARgamma interactions and rescues transrepression. Adipocytes from insulin resistant mice show reduced phosphorylation and increased nuclear accumulation of FoxO1, which is coupled to lowered expression of endogenous PPARgamma target genes. Thus the innate FoxO1 transrepression function enables insulin to augment PPARgamma activity, which in turn leads to insulin sensitization, and this feed-forward cycle represents positive reinforcing connections between insulin and PPARgamma signaling.