Background: A positive energy balance promotes white adipose tissue (WAT) expansion which is characterized by activation of a repertoire of events including hypoxia, inflammation and extracellular matrix remodelling. The transmembrane glycoprotein CD248 has been implicated in all these processes in different malignant and inflammatory diseases but its potential impact in WAT and metabolic disease has not been explored. Methods: The role of CD248 in adipocyte function and glucose metabolism was evaluated by omics analyses in human WAT, gene knockdowns in human in vitro differentiated adipocytes and by adipocyte-specific and inducible Cd248 gene knockout studies in mice. Findings: CD248 is upregulated in white but not brown adipose tissue of obese and insulin-resistant individuals. Gene ontology analyses showed that CD248 expression associated positively with pro-inflammatory/pro-fibrotic pathways. By combining data from several human cohorts with gene knockdown experiments in human adipocytes, our results indicate that CD248 acts as a microenvironmental sensor which mediates part of the adipose tissue response to hypoxia and is specifically perturbed in white adipocytes in the obese state. Adipocytespecific and inducible Cd248 knockouts in mice, both before and after diet-induced obesity and insulin resistance/glucose intolerance, resulted in increased microvascular density as well as attenuated hypoxia, inflammation and fibrosis without affecting fat cell volume. This was accompanied by significant improvements in insulin sensitivity and glucose tolerance. Interpretation: CD248 exerts detrimental effects on WAT phenotype and systemic glucose homeostasis which may be reversed by suppression of adipocyte CD248. Therefore, CD248 may constitute a target to treat obesity-associated co-morbidities.