The transcription factor PPAR plays an important role in regulating lipid and glucose metabolism, and improves insulin sensitivity in diabetic patients when activated by thiazolidinedione drugs. Several loss-of-function mutations in PPAR have been identified that cause lipodystrophy and diabetes in humans. Since affected individuals are heterozygotes and have one normal PPAR allele, it is of interest to know if these mutations act in a dominant/negative fashion to inhibit the activity of the wild-type receptor. Here we compare the molecular phenotypes of two previously identified PPAR mutations: P467L; reported to be dominant/negative, and F388L; reported to be devoid of dominant/negative activity. We developed a competitive chromatin-IP assay to measure the relative ability of mutant PPAR to compete with wild-type receptor for binding to a PPRE-containing promoter. By determining the ratio of mutant and wild-type receptors bound to a PPRE over time, we estimated the relative promoter turnover rate of each receptor. This assay demonstrated that PPAR bearing the P467L had a reduced promoter turnover rate compared to the F388L receptor, and over time out-competed the wild-type receptor for promoter binding sites. We propose that the P467L receptor is dominant/negative because in a cell containing both wild-type and mutant receptors, the majority of the PPAR-regulated promoters will be occupied by the transcriptionally defective mutant receptor. In contrast, the F388L mutation lacks dominant/negative activity because of its more rapid promoter turnover rate prevented it from out-competing the wild-type receptor for promoter binding sites.