Short-chain fatty acids (SCFAs) are the main products of dietary fiber fermentation and are believed to drive the fiber-related prevention of the metabolic syndrome. Here we show that dietary SCFAs induce a peroxisome proliferator–activated receptor-γ (PPARγ)–dependent switch from lipid synthesis to utilization. Dietary SCFA supplementation prevented and reversed high-fat diet–induced metabolic abnormalities in mice by decreasing PPARγ expression and activity. This increased the expression of mitochondrial uncoupling protein 2 and raised the AMP-to-ATP ratio, thereby stimulating oxidative metabolism in liver and adipose tissue via AMPK. The SCFA-induced reduction in body weight and stimulation of insulin sensitivity were absent in mice with adipose-specific disruption of PPARγ. Similarly, SCFA-induced reduction of hepatic steatosis was absent in mice lacking hepatic PPARγ. These results demonstrate that adipose and hepatic PPARγ are critical mediators of the beneficial effects of SCFAs on the metabolic syndrome, with clearly distinct and complementary roles. Our findings indicate that SCFAs may be used therapeutically as cheap and selective PPARγ modulators.