Cellular differentiation is regulated through activation and repression of defined transcription factors. A hallmark of differentiation is a pronounced change in cell shape, which is determined by dynamics of the actin cytoskeleton. Here we show that regulation of the transcriptional coactivator MKL1 (megakaryoblastic leukemia 1) by actin cytoskeleton dynamics drives adipocyte differentiation mediated by peroxisome proliferator-activated receptor γ (PPARγ), a master transcriptional regulator of adipogenesis. Induction of adipocyte differentiation results in disruption of actin stress fibres through downregulation of RhoA-ROCK signalling. The consequent rapid increase in monomeric G-actin leads to the interaction of G-actin with MKL1, which prevents nuclear translocation of MKL1 and allows expression of PPARγ followed by adipogenic differentiation. Moreover, we found that MKL1 and PPARγ act in a mutually antagonistic manner in the adipocytic differentiation programme. Our findings thus provide new mechanistic insight into the relation between the dynamics of cell shape and transcriptional regulation during cellular differentiation.