The importance of the nuclear receptor peroxisome proliferator–activated receptor-γ (PPARγ) in regulating insulin resistance and blood pressure has been demonstrated in families with loss of function mutations. Gain of function mutations has been associated with severe obesity. However, previous population studies of the common variant Pro12Ala have produced conflicting results. As it is likely that the natural ligands for this receptor may include fatty acids, we hypothesized that the effect of this common variant may be altered by the character of the diet, particularly the ratio of dietary polyunsaturated fat to saturated fat (P:S ratio). We studied 592 nondiabetic participants in an ongoing population-based cohort study who were genotyped for the Pro12Ala polymorphism in the PPAR γ2 isoform. As the Ala homozygotes were uncommon (2.0%), all analyses were conducted comparing Pro homozygotes (79.1%) to Ala allele carriers. There was no difference in fasting insulin concentration or BMI between Ala allele carriers and Pro homozygotes. The fasting insulin concentration was negatively associated with the P:S ratio (P = 0.0119) after adjustment for age and sex, and a strong interaction was evident between the P:S ratio and the Pro12Ala polymorphism for both BMI (P = 0.0038) and fasting insulin (P = 0.0097). The data suggest that when the dietary P:S ratio is low, the BMI in Ala carriers is greater than that in Pro homozygotes, but when the dietary ratio is high, the opposite is seen. This gene-nutrient interaction emphasizes the difficulty of examining the effect of common polymorphisms in the absence of data on nongenetic exposures, and may explain the heterogeneity of findings in previous studies.