Purpose Despite advances in the composition of defined embryo culture media, co-culture with somatic cells is still used for bovine in vitro embryo production (IVEP) in many laboratories worldwide. Granulosa cells are most often used for this purpose, although recent work suggests that co-culture with stem cells of adult or embryonic origin or their derived biomaterials may improve mouse, cattle, and pig embryo development. Materials and methods In experiment 1, in vitro produced bovine embryos were co-cultured in the presence of two concentrations of bovine adipose tissue-derived mesenchymal cells (b-ATMSCs; 10 3 and 10 4 cells/mL), in b-ATMSC preconditioned medium (SOF-Cond), or SOF alone (control). In experiment 2, co-culture with 10 4 b-ATMSCs/mL was compared to the traditional granulosa cell co-culture system (Gran). Results In experiment 1, co-culture with 10 4 b-ATMSCs/mL improved blastocyst rates in comparison to conditioned and control media (p < 0.05). Despite that it did not show difference with 10 3 b-ATMSCs/mL (p = 0.051), group 10 4 bATMSCs/mL yielded higher results of blastocyst production.In experiment 2, when compared to group Gran, co-culture with 10 4 b-ATMSCs/mL improved not only blastocyst rates but also quality as assessed by increased total cell numbers and mRNA expression levels for POU5F1 and G6PDH (p < 0.05). Conclusions Co-culture of bovine embryos with b-ATMSCs was more beneficial than the traditional co-culture system with granulosa cells. We speculate that the microenvironmental modulatory potential of MSCs, by means of soluble substances and exosome secretions, could be responsible for the positive effects observed. Further experiments must be done to evaluate if this beneficial effect in vitro also translates to an increase in offspring following embryo transfer. Moreover, this study provides an interesting platform to study the basic requirements during preimplantation embryo development, which, in turn, may aid the improvement of embryo culture protocols in bovine and other species.