Adipose (AD) tissue development and function relies on the ability of adipocytes to proliferate and differentiate into lipid-containing cells that also have endocrine function. Research suggests that certain conditions can induce AD tissue stem cells to differentiate into various cell types and that the microenvironment of the cell, including the extracellular matrix (ECM), is essential in maintaining cell and tissue function. This review provides an overview of factors involved in the proliferation and differentiation of adipocytes. A brief review of the numerous factors that influence PPARg, the transcription factor thought to be the master regulator of adipocyte differentiation, provides context of established pathways that regulate adipogenesis. Thought provoking findings from research with hypoxia that is supported by earlier research that vascular development is related to adipogenesis are reviewed. Finally, our understanding of the critical role of the ECM and environment in adipogenesis is discussed and compared with studies that suggest that adipocytes may dedifferentiate and can convert into other cell types.