Obesity is associated with a variety of disorders including cardiovascular diseases, diabetes mellitus and cancer. Obesity changes the composition and structure of adipose tissue, linked to pro-inflammatory environment, endocrine/metabolic dysfunction, insulin resistance and oxidative stress. Adipose-derived mesenchymal stem cells (ASCs) have multiple functions like cell renewal, spontaneous repair and homeostasis in adipose tissue. In this review article, we have summarized the recent data highlighting that ASCs in obesity are defective in various functionalities and properties including differentiation, angiogenesis, motility, multipotent state, metabolism and immunomodulation. Inflammatory milieu, hypoxia and abnormal metabolites in obese tissue are crucial for impairing the functions of ASCs. Further work is required to explore the precise molecular mechanisms underlying its alterations and impairments. Based on these data, we suggest that deregulated ASCs, possibly also other mesenchymal stem cells, are important in promoting the development of obesity. Restoration of ASCs/mesenchymal stem cells might be an additional strategy to combat obesity and its associated diseases.