Pathological accumulation of white adipose tissue (WAT) is the major hallmark of obesity. Increase of WAT in obesity involves the hypertrophic growth of adipocytes as well as the proliferation and differentiation of adipose precursors (APs). However, the underlying molecular mechanisms of the latter still remain unclear. In this work, we identify Heme Oxygenase-1 (HO-1) as selectively being upregulated in the AP fraction of WAT, in response to high-fat diet (HFD) feeding in mice. In vivo, AP specific deletion of HO-1 in Hmox1fl/flPdgfraCre mice enhanced HFD-dependent visceral AP proliferation and differentiation, upstream of Cebpα and PPARγ. Similar effects on human preadipocyte proliferation and differentiation in vitro were observed upon modulation of HO-1 expression. Mechanistically, HO-1 reduces HFD induced AKT2 via ROS thresholding in mitochondria. In vivo, deletion of HO-1 in APs is sufficient to lower blood glucose, insulin and free fatty acid levels as well as liver steatosis during obesity. This effect was lost when HO-1 was deleted at later stages of adipogenesis using AdipoQ-Cre. Together, our data identify HO-1 as a diet-induced regulator limiting visceral adipose tissue function during obesity.