WISP2 is a novel adipokine, most highly expressed in the adipose tissue and primarily in undifferentiated mesenchymal cells. As a secreted protein, it is an autocrine/paracrine activator of canonical WNT signaling and, as an intracellular protein, it helps to maintain precursor cells undifferentiated. To examine effects of increased WISP2 in vivo, we generated an aP2-WISP2 transgenic (Tg) mouse. These mice had increased serum levels of WISP2, increased lean body mass and whole body energy expenditure, hyperplastic brown/white adipose tissues and larger hyperplastic hearts. Obese Tg mice remained insulin sensitive, had increased glucose uptake by adipose cells and skeletal muscle in vivo and ex vivo, increased GLUT4, increased ChREBP and markers of adipose tissue lipogenesis. Serum levels of the novel fatty acid esters of hydroxy fatty acids (FAHFAs) were increased and transplantation of Tg adipose tissue improved glucose tolerance in recipient mice supporting a role of secreted FAHFAs. The growth-promoting effect of WISP2 was shown by increased BrdU incorporation in vivo and Tg serum increased mesenchymal precursor cell proliferation in vitro. In contrast to conventional canonical WNT ligands, WISP2 expression was inhibited by BMP4 thereby allowing normal induction of adipogenesis. WISP2 is a novel secreted regulator of mesenchymal tissue cellularity.