Human mesenchymal stem cells (MSCs) expressed substantial levels of CYP2J2, a major CYP450 involved in epoxyeicosatrienoic acid (EET) formation. MSCs synthesized significant levels of EETs (65.8 ± 5.8 pg/mg protein) and dihydroxyeicosatrienoic acids (DHETs) (15.83 ± 1.62 pg/mg protein), suggesting the presence of soluble epoxide hydrolase (sEH). The addition of an sEH inhibitor to MSC culture decreased adipogenesis. EETs decreased MSC-derived adipocytes in a concentration-dependent manner, 8,9- and 14,15-EET having the maximum reductive effect on adipogenesis. We examined the effect of 12-(3-hexylureido)dodec-8(Z)-enoic acid, an EET agonist, on MSC-derived adipocytes and demonstrated an increased number of healthy small adipocytes, attenuated fatty acid synthase (FAS) levels (P < 0.01), and reduced PPARγ, C/EBPα, FAS, and lipid accumulation (P < 0.05). These effects were accompanied by increased levels of heme oxygenase (HO)-1 and adiponectin (P < 0.05), and increased glucose uptake (P < 0.05). Inhibition of HO activity or AKT by tin mesoporphyrin (SnMP) and LY2940002, respectively, reversed EET-induced inhibition of adipogenesis, suggesting that activation of the HO-1-adiponectin axis underlies EET effect in MSCs. These findings indicate that EETs decrease MSC-derived adipocyte stem cell differentiation by upregulation of HO-1-adiponectin-AKT signaling and play essential roles in the regulation of adipocyte differentiation by inhibiting PPARγ, C/EBPα, and FAS and in stem cell development. These novel observations highlight the seminal role of arachidonic acid metabolism in MSCs and suggest that an EET agonist may have potential therapeutic use in the treatment of dyslipidemia, diabetes, and the metabolic syndrome.