Oxidative stress and low-grade inflammation have been implicated in obesity and insulin resistance. As a selenium transporter, ubiquitously expressed selenoprotein P (SeP) is known to play a role in the regulation of antioxidant enzyme activity. However, SeP expression and regulation in adipose tissue in obesity and its role in inflammation and adipocyte biology remain unexplored. In this study, we examined Sepp1 gene expression and regulation in adipose tissue of obese rodents and characterized the role of Sepp1 in adipose inflammation and adipogenesis in 3T3-L1 adipocytes. We found that Sepp1 gene expression was significantly reduced in adipose tissue of ob/ob and high-fat diet-induced obese mice as well as in primary adipose cells isolated from Zucker obese rats. Rosiglitazone administration increased SeP protein expression in adipose tissue of obese mice. Treatment of either TNFα or H₂O₂ significantly reduced Sepp1 gene expression in a time- and dose-dependent manner in 3T3-L1 adipocytes. Interestingly, Sepp1 gene silencing resulted in the reduction in glutathione peroxidase activity and the upregulation of inflammatory cytokines MCP-1 and IL-6 in preadipocytes, leading to the inhibition of adipogenesis and adipokine and lipogenic gene expression. Most strikingly, coculturing Sepp1 KD cells resulted in a marked inhibition of normal 3T3-L1 adipocyte differentiation. We conclude that SeP has an important role in adipocyte differentiation via modulating oxidative stress and inflammatory response.