An increase in fat mass associated with obesity results from recruitment and differentiation of adipocyte progenitor cells. The precise origin of these cells is unknown, although accumulating evidence suggests that circulating stem cells can differentiate into cells of mesenchymal lineage. It is currently unclear whether a progenitor adipocyte population exists in circulation. One potential candidate is the fibrocyte, which may represent a common progenitor cell for several mesenchymal lineages. We demonstrate that these circulating progenitors become adipocytes when cultured under adipogenic conditions, with intracellular lipids accumulation and up‐regulation of proteins specific for adipocyte differentiation, including leptin, PPARγ, and FABP4. cDNA microarray analysis revealed gene clusters that were differentially regulated during adipogenesis of fibrocytes, which were similar to visceral and subcutaneous adipose tissue preadipocyte‐to‐adipocyte differentiation. Moreover, these progenitors engrafted and formed human adipose tissue following injection into SCID mice. Although fibrocytes express an array of chemokine receptors, we observed an up‐regulation of CCR2 expression following fibrocytes differentiation into adipocytes, which was associated with increased chemotactic response to CCL2. This paradigm supports the notion that elevated CCL2 levels in visceral adipose tissue associated with Metabolic Syndrome is a chemotactic niche, whereby fibrocytes can home to and differentiate into adipocytes to perpetuate its tissue formation.