Sarcopenia due to loss of skeletal muscle mass and strength leads to physical inactivity and decreased quality of life. The number of individuals with sarcopenia is rapidly increasing as the number of older people increases worldwide, making this condition a medical and social problem. Some patients with sarcopenia exhibit accumulation of peri-muscular adipose tissue (PMAT) as ectopic fat deposition surrounding atrophied muscle. However, an association of PMAT with muscle atrophy has not been demonstrated. Here, we show that PMAT is associated with muscle atrophy in aged mice and that atrophy severity increases in parallel with cumulative doses of PMAT. We observed severe muscle atrophy in two different obese model mice harboring significant PMAT relative to respective control non-obese mice. We also report that denervation-induced muscle atrophy was accelerated in non-obese young mice transplanted around skeletal muscle with obese adipose tissue relative to controls transplanted with non-obese adipose tissue. Notably, transplantation of obese adipose tissue into peri-muscular regions increased nuclear translocation of FoxO transcription factors and upregulated expression FoxO targets associated with proteolysis (Atrogin1 and MuRF1) and cellular senescence (p19 and p21) in muscle. Conversely, in obese mice, PMAT removal attenuated denervation-induced muscle atrophy and suppressed upregulation of genes related to proteolysis and cellular senescence in muscle. We conclude that PMAT accumulation accelerates age- and obesity-induced muscle atrophy by increasing proteolysis and cellular senescence in muscle.