The adipocyte is the most abundant stromal cell phenotype in adult human bone marrow. Four hypotheses may explain their function. First, adipocytes may serve a passive role, simply occupying excess space in the bone marrow cavity. Second, they may play an active role in systemic lipid metabolism. Third, adipocytes may provide a localized energy reservoir in the bone marrow. Or fourth, marrow adipocytes may contribute directly to the promotion of hematopoiesis and influence osteogenesis. This article reviews recent findings concerning bone marrow adipocyte morphology and physiology, the transcriptional and cytokine mechanisms regulating their differentiation, and the interrelationships existing between bone marrow adipocytes, hematopoiesis, and osteogenesis. Overall, these data lend support to a “plastic” model of bone marrow stromal cell differentiation; adipocytes may share common functions with stromal stem cells, osteoblasts, and hematopoietic supportive cells.