This study is the first documentation of the isolation and extensive characterization of mesenchymal stem cells from canine adipose tissue. Methods previously used by our group to isolate and differentiate human adipose-derived mesenchymal stem cells (hAD-MSCs) have been modified and optimized for derivation of similar cells from canine adipose tissues. The canine adipose tissue-derived mesenchymal stem cells (cAD-MSCs) showed lower proliferation ability and were refractory to osteogenic and adipogenic differentiation under conditions employed to differentiate hAD-MSCs. The differentiation of cAD-MSCs into osteoblasts and adipocytes was effectively achieved under modified conditions, by using laminin-coated plates and peroxisome proliferative activated receptor, gamma (PPARgamma) ligands, respectively. The formation of micromass was sufficient to induce chondrogenesis, unlike hAD-MSCs, which require transforming growth factor beta (TGF-beta). These cells displayed anchorage-independent growth in soft agar, and their colony-forming efficiency in plastic was comparable with human counterparts. The cAD-MSCs expressed genes associated with pluripotency, while their differentiated progeny expressed appropriate lineage-specific genes. The optimization of growth and differentiation of cAD-MSCs should facilitate future stem cell-based reparative and regenerative studies in dogs. The dog is a promising biomedical model that is suitable for evaluation of novel therapies such as those employing stem cells in experimental and in spontaneous disease settings.