Fat cells (adipocytes) develop from adipocyte precursor cells(preadipocytes) that themselves derive from mesenchymal progenitors. Although the events controlling preadipocyte differentiation into mature adipocytes have been largely explored, the mechanisms that direct mesenchymal progenitors down the adipocyte pathway remain unknown. Similarly, although adipocytes are generally thought to derive from mesoderm, key information is lacking regarding the origin and the development of the adipose tissue during embryogenesis. The aim of this study was to gain insight into the ontogeny of fat cells, both in mouse embryonic stem (mES) cell-derived cultures and during normal development. We first used genetically engineered mES cells to produce and select ES cell-derived neuroepithelial progenitors and showed that neuroectoderm, rather than mesoderm, may be a source of adipocytes in mES cell-derived cultures. We then used primary and secondary cultures of developing quail neural crest (NC) cells to demonstrate that NC cells are able, upon stimulation with defined factors, to differentiate into adipocytes,thus providing a powerful system to study the earliest stages of adipocyte differentiation. Finally, we mapped NC derivatives in vivo using Cre-mediated recombination in transgenic mice and demonstrated that a subset of adipocytes originates from the NC during normal development.