White adipose tissue expands through both adipocyte hypertrophy and hyperplasia and it is hypothesized that fibrosis or excess accumulation of extracellular matrix within adipose tissue may limit tissue expansion contributing to metabolic dysfunction. The pathways that control adipose tissue remodeling are only partially understood, however it is likely that adipose tissue stromal and perivascular progenitors participate in fibrotic remodeling and also serve as adipocyte progenitors. The goal of this study was to investigate the role of the secreted extracellular matrix protein aortic carboxypeptidase-like protein (ACLP) on adipose progenitor differentiation in the context of adipose tissue fibrosis. Treatment of 10T1/2 mouse cells with recombinant ACLP suppressed adipogenesis and enhanced myofibroblast differentiation, which was dependent on transforming growth factor-β receptor kinase activity. Mice fed a chronic high fat diet exhibited white adipose tissue fibrosis with elevated ACLP expression and cellular fractionation of these depots revealed that ACLP was co-expressed with collagens primarily in the inflammatory cell depleted stromal-vascular fraction (SVF). SVF cells isolated from mice fed a high fat diet secreted increased amounts of ACLP compared to low fat diet control SVF. These cells also exhibited reduced adipogenic differentiation capacity in vitro. Importantly, differentiation studies in primary human adipose stromal cells revealed that mature adipocytes do not express ACLP and exogenous ACLP administration blunted their differentiation potential while upregulating myofibroblastic markers. Collectively, these studies identify ACLP as a stromal derived mediator of adipose progenitor differentiation that may limit adipocyte expansion during white adipose tissue fibrosis.