Although the major white adipose depots evolved primarily to store energy, secrete hormones and thermo-insulate the body, multiple secondary depots developed additional specialized and unconventional functions. Unlike any other fat tissue, dermal white adipose tissue (dWAT) evolved a large repertoire of novel features that are central to skin physiology, which we discuss in this Review. dWAT exists in close proximity to hair follicles, the principal appendages of the skin that periodically grow new hairs. Responding to multiple hair-derived signals, dWAT becomes closely connected to cycling hair follicles and periodically cycles itself. At the onset of new hair growth, hair follicles secrete activators of adipogenesis, while at the end of hair growth, a reduction in the secretion of activators or potentially, an increase in the secretion of inhibitors of adipogenesis, results in fat lipolysis. Hair-driven cycles of dWAT remodelling are uncoupled from size changes in other adipose depots that are controlled instead by systemic metabolic demands. Rich in growth factors, dWAT reciprocally signals to hair follicles, altering the activation state of their stem cells and modulating the pace of hair regrowth. dWAT cells also facilitate skin repair following injury and infection. In response to wounding, adipose progenitors secrete repair-inducing activators, while bacteria-sensing adipocytes produce antimicrobial peptides, thus aiding innate immune responses in the skin.