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Maternal obesity (MO) predisposes offspring to obesity and type 2 diabetes despite poorly defined mechanisms. Zfp423 is the key transcription factor committing cells to the adipogenic lineage, with exceptionally dense CpG sites in its promoter. We hypothesized that MO enhances adipogenic differentiation during fetal development through inducing epigenetic changes in the Zfp423 promoter and elevating its expression. Female mice were subjected to a control (Con) or obesogenic (OB) diet for 2 months, mated, and maintained on their diets during pregnancy. Fetal tissue was harvested at embryonic day 14.5 (E14.5), when the early adipogenic commitment is initiated. The Zfp423 expression was 3.6-fold higher and DNA methylation in the Zfp423 promoter was lower in OB compared with Con. Correspondingly, repressive histone methylation (H3K27me3) was lower in the Zfp423 promoter of OB fetal tissue, accompanied by reduced binding of enhancer of zeste 2 (EZH2). Gain- and loss-of-function analysis showed that Zfp423 regulates early adipogenic differentiation in fetal progenitor cells. In summary, MO enhanced Zfp423 expression and adipogenic differentiation during fetal development, at least partially through reducing DNA methylation in the Zfp423 promoter, which is expected to durably elevate adipogenic differentiation of progenitor cells in adult tissue, programming adiposity and metabolic dysfunction later in life. Diabetes 62:3727-3735, 2013, According to the latest National Health and Nutrition Examination Survey (NHANES; 2009-2010), 31.9% of nonpregnant women 20-39 years of age in the U.S. are obese, and another one-third are overweight [...]