Adipose tissue can undergo rapid expansion during times of excess caloric intake. Like a rapidly expanding tumor mass, obese adipose tissue becomes hypoxic due to the inability of the vasculature to keep pace with tissue growth. Consequently, during the early stages of obesity, hypoxic conditions cause an increase in the level of hypoxia-inducible factor 1α (HIF1α) expression. Using a transgenic model of overexpression of a constitutively active form of HIF1α, we determined that HIF1α fails to induce the expected proangiogenic response. In contrast, we observed that HIF1α initiates adipose tissue fibrosis, with an associated increase in local inflammation.“Trichrome-and picrosirius red-positive streaks,” enriched in fibrillar collagens, are a hallmark of adipose tissue suffering from the early stages of hypoxia-induced fibrosis. Lysyl oxidase (LOX) is a transcriptional target of HIF1α and acts by cross-linking collagen I and III to form the fibrillar collagen fibers. Inhibition of LOX activity by β-aminoproprionitrile treatment results in a significant improvement in several metabolic parameters and further reduces local adipose tissue inflammation. Collectively, our observations are consistent with a model in which adipose tissue hypoxia serves as an early upstream initiator for adipose tissue dysfunction by inducing a local state of fibrosis.