Excessive accumulation of white adipose tissue (WAT) is a hallmark of obesity. The expansion of WAT in obesity involves proliferation and differentiation of adipose precursors, however, the underlying molecular mechanisms remain unclear. Here, we used an unbiased transcriptomics approach to identify the earliest molecular underpinnings occuring in adipose precursors following a brief HFD in mice. Our analysis identifies Heme Oxygenase-1 (HO-1) as strongly and selectively being upregulated in the adipose precursor fraction of WAT, upon high-fat diet (HFD) feeding. Specific deletion of HO-1 in adipose precursors of Hmox1fl/flPdgfraCre mice enhanced HFD-dependent visceral adipose precursor proliferation and differentiation. Mechanistically, HO-1 reduces HFD-induced AKT2 phosphorylation via ROS thresholding in mitochondria to reduce visceral adipose precursor proliferation. HO-1 influences adipogenesis in a cell-autonomous way by regulating events early in adipogenesis, during the process of mitotic clonal expansion, upstream of Cebpα and PPARγ. Similar effects on human preadipocyte proliferation and differentiation in vitro were observed upon modulation of HO-1 expression. This collectively renders HO-1 as an essential factor linking extrinsic factors (HFD) with inhibition of specific downstream molecular mediators (ROS &AKT2), resulting in diminished adipogenesis that may contribute to hyperplastic adipose tissue expansion.