Worldwide obesity rates are at epidemic levels, and new insight into the regulation of obesity and adipogenesis are required. Thy1 (CD90), a cell surface protein with an enigmatic function, is expressed on subsets of fibroblasts and stem cells. We used a diet-induced obesity model to show that Thy1-null mice gain weight at a faster rate and gain 30% more weight than control C57BL/6 mice. During adipogenesis, Thy1 expression is lost in mouse 3T3-L1 cells. Overexpression of Thy1 blocked adipocyte formation and reduced mRNA and protein expression of an adipocyte marker, fatty acid-binding protein 4, by 5-fold. Although preadipocyte fibroblasts expressed Thy1 mRNA and protein, adipocytes from mouse and human fat tissue had almost undetectable Thy1 levels. Thy1 decreases the activity of the adipogenic transcription factor PPARγ by more than 60% as shown by PPARγ-dependent reporter assays. Using both genetic and pharmacologic approaches, we show Thy1 expression dampens PPARγ by inhibiting the activity of the Src-family kinase, Fyn. Thus, these studies reveal Thy1 blocks adipogenesis and PPARγ by inhibiting Fyn and support the idea that Thy1 is a novel therapeutic target in obesity.—Woeller, CF, O’Loughlin, CW, Pollock, SJ, Thatcher, TH, Feldon, SE, Phipps, RP Thy1 (CD90) controls adipogenesis by regulating activity of the Src family kinase, Fyn.