Obesity has been proposed as an energy balance disorder in which the expansion of adipose tissue (AT) leads to unfavorable health outcomes. Even though adiposity represents the most powerful driving force for the development of insulin resistance (IR) and type 2 diabetes, mounting evidence points to “adipose dysregulation”, rather than fat mass accrual per se, as a key pathophysiological trigger of the obesity-linked metabolic complications. The dysfunctional fat, besides hypertrophic adipose cells and inflammatory cues, displays a reduced ability to form new adipocytes from the undifferentiated precursor cells (ie, the preadipocytes). The failure of adipogenesis poses a “diabetogenic” milieu either by promoting the ectopic overflow/deposition of lipids in non-adipose targets (lipotoxicity) or by inducing a dysregulated secretion of different adipose-derived hormones (ie, adipokines and lipokines). This novel and provocative paradigm (“expandability hypothesis”) further extends current “adipocentric view” implicating a reduced adipogenic capacity as a missing link between “unhealthy” fat expansion and impairment of metabolic homeostasis. Hitherto, reactive oxygen species have been implicated in multiple forms of IR. However, the effects of stress on adipogenesis remain controversial. Compelling circumstantial data indicate that lipid peroxidation by-products (ie, oxysterols and 4-hydrononenal) may detrimentally affect adipose homeostasis partly by impairing (pre)adipocyte differentiation. In this scenario, it is tempting to speculate that a fine tuning of the adipose redox status may provide new mechanistic insights at the interface between fat dysregulation and development of metabolic dysfunctions. Yet, in humans, the molecular “signatures” of oxidative stress in the dysregulated fat as well as the pathophysiological effects of adipose (per)oxidation on glucose homeostasis remain poorly investigated. In this review we will summarize the potential mechanisms by which increased oxidative stress in fat may impair (pre)adipocyte differentiation and promote the adipose dysfunction. We will also attempt to highlight the conundrum with the adipose redox changes and the regulation of glucose homeostasis. Finally, we will briefly discuss the scientific rationale for proposing the adipose redox state as a potential target for novel therapeutic strategies to curb/prevent adiposity-linked insulin resistance. Display omitted ► Adipose tissue is a remarkably active organ that may act as a trigger of insulin resistance or type 2 diabetes. ► Lipid peroxidation within fat tissue generates by-products that modulate adipogenic differentiation of precursor cells. ► Oxysterols and 4-hydroxynonenal may detrimentally affect adipocyte function and systemic insulin status.