The bile acid-activated nuclear receptor, FXR (NR1H4), has been implicated in the control of lipid and energy metabolism, but its role in fat tissue, where it is moderately expressed, is not understood. In view of the recent development of FXR-targeting therapeutics for treatment of human metabolic diseases, understanding the tissue-specific actions of FXR is essential. Transgenic mice expressing human FXR in adipose tissue (aP2-hFXR mice) at three to five times higher levels than endogenous Fxr, i.e., much lower than its expression in liver and intestine, have markedly enlarged adipocytes and show extensive extracellular matrix remodeling. Ageing and exposure to obesogenic conditions revealed a strongly limited capacity for adipose expansion and development of fibrosis in adipose tissues of aP2-hFXR transgenic mice. This was associated with impaired lipid storage capacity, leading to elevated plasma free fatty acids and ectopic fat deposition in liver and muscle as well as whole-body insulin resistance. These studies establish that adipose FXR is a determinant of adipose tissue architecture and contributes to whole-body lipid homeostasis.