Inability to recruit new adipose cells following weight gain leads to inappropriate enlargement of existing cells (hypertrophic obesity) associated with inflammation and a dysfunctional adipose tissue. We found increased expression of WNT1 inducible signaling pathway protein 2 (WISP2) and other markers of WNT activation in human abdominal s.c. adipose tissue characterized by hypertrophic obesity combined with increased visceral fat accumulation and insulin resistance. WISP2 activation in the s.c. adipose tissue, but not in visceral fat, identified the metabolic syndrome in equally obese individuals. WISP2 is a novel adipokine, highly expressed and secreted by adipose precursor cells. Knocking down WISP2 induced spontaneous differentiation of 3T3-L1 and human preadipocytes and allowed NIH 3T3 fibroblasts to become committed to the adipose lineage by bone morphogenetic protein 4 (BMP4). WISP2 forms a cytosolic complex with the peroxisome proliferator-activated receptor γ (PPARγ) transcriptional activator zinc finger protein 423 (Zfp423), and this complex is dissociated by BMP4 in a SMAD-dependent manner, thereby allowing Zfp423 to enter the nucleus, activate PPARγ, and commit the cells to the adipose lineage. The importance of intracellular Wisp2 protein for BMP4-induced adipogenic commitment and PPARγ activation was verified by expressing a mutant Wisp2 protein lacking the endoplasmic reticulum signal and secretion sequence. Secreted Wnt/Wisp2 also inhibits differentiation and PPARγ activation, albeit not through Zfp423 nuclear translocation. Thus adipogenic commitment and differentiation is regulated by the cross-talk between BMP4 and canonical WNT signaling and where WISP2 plays a key role. Furthermore, they link WISP2 with hypertrophic obesity and the metabolic syndrome.