Excessive caloric intake without a rise in energy expenditure promotes adipocyte hyperplasia and adiposity. The rise in adipocyte number is triggered by signaling factors that induce conversion of mesenchymal stem cells (MSCs) to preadipocytes that differentiate into adipocytes. MSCs, which are recruited from the vascular stroma of adipose tissue, provide an unlimited supply of adipocyte precursors. Members of the BMP and Wnt families are key mediators of stem cell commitment to produce preadipocytes. Following commitment, exposure of growth-arrested preadipocytes to differentiation inducers [insulin-like growth factor 1 (IGF1), glucocorticoid, and cyclic AMP (cAMP)] triggers DNA replication and reentry into the cell cycle (mitotic clonal expansion). Mitotic clonal expansion involves a transcription factor cascade, followed by the expression of adipocyte genes. Critical to these events are phosphorylations of the transcription factor CCATT enhancer-binding protein β (C/EBPβ) by MAP kinase and GSK3β to produce a conformational change that gives rise to DNA-binding activity. "Activated" C/EBPβ then triggers transcription of peroxisome proliferator-activated receptor-γ (PPARγ) and C/EBPα, which in turn coordinately activate genes whose expression produces the adipocyte phenotype.