Most adipocytes exist in discrete depots throughout the body, notably in well-defined white and brown adipose tissues. However, adipocytes also reside within specialized niches, of which the most abundant is within bone marrow. Whereas bone marrow adipose tissue (BMAT) shares many properties in common with white adipose tissue, the distinct functions of BMAT are reflected by its development, regulation, protein secretion, and lipid composition. In addition to its potential role as a local energy reservoir, BMAT also secretes proteins, including adiponectin, RANK ligand, dipeptidyl peptidase-4, and stem cell factor, which contribute to local marrow niche functions and which may also influence global metabolism. The characteristics of BMAT are also distinct depending on whether marrow adipocytes are contained within yellow or red marrow, as these can be thought of as ‘constitutive’ and ‘regulated’, respectively. The rBMAT for instance can be expanded or depleted by myriad factors, including age, nutrition, endocrine status and pharmaceuticals. Herein we review the site specificity, age-related development, regulation and metabolic characteristics of BMAT under various metabolic conditions, including the functional interactions with bone and hematopoietic cells.