Fat occupies a significant portion of bone cavity however its function is largely unknown. Marrow fat expands during aging and in conditions which affect energy metabolism, indicating that fat in bone is under similar regulatory mechanisms as other fat depots. On the other hand, its location may determine specific functions in the maintenance of the environment for bone remodeling and hematopoiesis. We have demonstrated that marrow fat has a distinctive phenotype, which resembles both, white and brown adipose tissue (WAT and BAT, respectively). Marrow adipocytes express gene markers of brown adipocytes at levels characteristic for the BAT, including transcription factor Prdm16, and regulators of thermogenesis such as deiodinase 2 (Dio2) and PGC1α. The levels of expression of BAT-specific gene markers are decreased in bone of 24 mo old C57BL/6 and in diabetic yellow agouti A vy/a mice implicating functional changes of marrow fat occurring with aging and diabetes. Administration of antidiabetic TZD rosiglitazone, which sensitizes cells to insulin and increases adipocyte metabolic functions, significantly increased both, BAT (UCP1, PGC1α, Dio2, β3AR, Prdm16, and FoxC2) and WAT (adiponectin and leptin) gene expression in marrow of normoglycemic C57BL/6 mice, but failed to increase the expression of BAT, but not WAT, gene markers in diabetic mice. In conclusion, the metabolic phenotype of marrow fat combines both BAT and WAT characteristics. Decrease in BAT-like characteristics with aging and diabetes may contribute to the negative changes in the marrow environment supporting bone remodeling and hematopoiesis. This article is part of a Special Issue entitled: Interactions Between Bone, Adipose Tissue and Metabolism. © 2011 Elsevier Inc.