The laboratory mouse is a key animal model for studies of adipose biology, metabolism and disease, yet the developmental changes that occur in tissues and cells that become the adipose layer in mouse skin have received little attention. Moreover, the terminology around this adipose body is often confusing, as frequently no distinction is made between adipose tissue within the skin, and so called subcutaneous fat. Here adipocyte development in mouse dorsal skin was investigated from before birth to the end of the first hair follicle growth cycle. Using Oil Red O staining, immunohistochemistry, quantitative RT-PCR and TUNEL staining we confirmed previous observations of a close spatio-temporal link between hair follicle development and the process of adipogenesis. However, unlike previous studies, we observed that the skin adipose layer was created from cells within the lower dermis. By day 16 of embryonic development (e16) the lower dermis was demarcated from the upper dermal layer, and commitment to adipogenesis in the lower dermis was signalled by expression of FABP4, a marker of adipocyte differentiation. In mature mice the skin adipose layer is separated from underlying subcutaneous adipose tissue by the panniculus carnosus. We observed that the skin adipose tissue did not combine or intermix with subcutaneous adipose tissue at any developmental time point. By transplanting skin isolated from e14.5 mice (prior to the start of adipogenesis), under the kidney capsule of adult mice, we showed that skin adipose tissue develops independently and without influence from subcutaneous depots. This study has reinforced the developmental link between hair follicles and skin adipocyte biology. We argue that because skin adipocytes develop from cells within the dermis and independently from subcutaneous adipose tissue, that it is accurately termed dermal adipose tissue and that, in laboratory mice at least, it represents a separate adipose depot.