Peroxisome proliferator-activated receptor gamma (PPARγ) plays a central role in cell differentiation, metabolism and tumorigenesis. We have investigated the therapeutic properties of 5-[[6-[(2-fluorophenyl)-methoxy]-2-napthalenyl]-methyl]-2,4-thiazolidinedione (MCC-555) a PPARγ agonist in human colorectal cancer cells. To elucidate the molecular mechanism(s), by which MCC-555 exerts its effects on the human colorectal cancer cells, we have analyzed the expression of two pro-apoptotic proteins, Krüppel-like factor 4 (KLF4) and nonsteroidal anti-inflammatory drug (NSAID)-activated gene-1 (NAG-1). MCC-555-induced expression of the transcription factor, KLF-4 was blocked by a PPARγ specific antagonist GW9662 in PPARγ-dependent manner in HCT-116 cells. We further identified a new KLF4 target gene NAG-1, which shows a pro-apoptotic activity. We confirmed that PPARγ agonists-induced NAG-1 expression was abolished using KLF4 siRNA in HCT-116 cells. Subsequently, KLF4 expression enhances the NAG-1 promoter activity in HCT-116 cells, and functional KLF4 binding sites in the NAG-1 promoter were also identified. MCC-555, a PPARγ agonist induced the expression of Klf4 mRNA and protein in murine intestinal tumors from MCC-555-treated mice, as assessed by RT-PCR and immunohistochemistry. This study shows that PPARγ agonists up-regulate KLF4 expression in receptor-dependent manner, and KLF4 was identified as a novel transcription factor that controls NAG-1 promoter activity in human and mouse colorectal cancers.