Reactive oxygen species (ROS) increase during adipogenesis and in obesity. Oxidants react with cysteine residues of proteins to form glutathione (GSH) adducts, S-glutathionylation, that are selectively removed by glutaredoxin-1 (Glrx). We have previously reported that Glrx knockout mice had increased protein S-glutathionylation and developed obesity by an unknown mechanism. In this study, we demonstrated that 3T3L1 adipocytes differentiation increased ROS and protein S-glutathionylation. Glrx ablation elevated protein S-glutathionylation and lipid content in 3T3L1 cells. Glrx replenishment decreased the lipid content of Glrx KO 3T3L1 cells. Glrx KO also increased protein expression and protein S-glutathionylation of the adipogenic transcription factor CCAAT enhancer-binding protein (C/EBP) β. Protein S-glutathionylation decreased the interaction of C/EBPβ and protein inhibitor of activated STAT (PIAS) 1, a small ubiquitin-related modifier E3 ligase that facilitates C/EBPβ degradation. Experiments with truncated mutant C/EBPβ demonstrated that PIAS1 interacted with the liver-enriched inhibitory protein (LIP) region of C/EBPβ. Furthermore, mass spectrometry analysis identified protein S-glutathionylation of Cys201 and Cys296 in the LIP region of C/EBPβ. The C201S, C296S double-mutant C/EBPβ prevented protein S-glutathionylation and preserved the interaction with PIAS1. In summary, Glrx ablation stimulated 3T3L1 cell differentiation and adipogenesis via increased protein S-glutathionylation of C/EBPβ, stabilizing and increasing C/EBPβ protein levels.