Objective: Obesity and aging both involve ectopic accumulation of adipose (fat) and deterioration of muscle function. Postnatal growth and hypertrophy of skeletal muscle and adipose tissues are maintained by tissue resident stem cells. Adipose stem cells are found in various tissues while muscle stem cells (satellite cells) reside only in the skeletal muscles. Understanding how muscle and fat interact has important implications in the treatment of aging related muscular diseases and obesity.Materials and Methods: Stem cell lineage tracing and lineage ablation analysis, tissue regeneration assay and metabolic analysis in mice are employed to dissect thein vivointeraction between muscle and fat and its implication in muscle regeneration and obesity.Results: We discovered that intramuscular adipose progenitors are necessary for proper regeneration of injured skeletal muscles (Liu et al 2012, Dev Biol). By contrast, we show that skeletal muscle cells robustly inhibit the differentiation of adipose stem cells. This is the first study establishing a requirement for adipose tissue in skeletal muscle function and challenges the traditional view that muscle degeneration in the aging population is triggered by ectopic fat accumulation. Instead, our result suggests that ectopic fat accumulation in the aged and dystrophic muscle is a consequence of muscle deterioration (wasting) that abrogates the inhibitory effect of healthy muscle on adipose differentiation. Consistent with this notion, we demonstrate that muscle hypertrophy due to myostatin mutation reduces intramuscular fat content and promotes the conversion of the lipid-storing white adipocyte into lipid-catabolizing brown adipocytes (Shan et al, 2013 FASEB J). We further identify irisin as a myokine (muscle hormone) that mediates the effect of muscle hypertrophy on adipose tissues.Conclusion: Together, our studies demonstrate active interactions between skeletal muscle (stem cells) and adipose (stem cells). We provide compelling evidence that intramuscular adipose is necessary for proper muscle function but muscle hypertrophy promotes the conversion of white adipocytes to brown adipocytes, therefore reducing obesity risks.