Cyclic AMP (cAMP)-dependent processes are pivotal during the early stages of adipocyte differentiation. We show that exchange protein directly activated by cAMP (Epac), which functions as a guanine nucleotide exchange factor for the Ras-like GTPases Rap1 and Rap2, was required for cAMP-dependent stimulation of adipocyte differentiation. Epac, working via Rap, acted synergistically with cAMP-dependent protein kinase (protein kinase A [PKA]) to promote adipogenesis. The major role of PKA was to down-regulate Rho and Rho-kinase activity, rather than to enhance CREB phosphorylation. Suppression of Rho-kinase impaired proadipogenic insulin/insulin-like growth factor 1 signaling, which was restored by activation of Epac. This interplay between PKA and Epac-mediated processes not only provides novel insight into the initiation and tuning of adipocyte differentiation, but also demonstrates a new mechanism of cAMP signaling whereby cAMP uses both PKA and Epac to achieve an appropriate cellular response.