Adipocytes are intimately associated with the dermal compartment of the skin, existing in a specialized dermal depot and displaying dynamic changes in size during tissue homeostasis. However, the roles of adipocytes in cutaneous biology and disease are not well understood. Traditionally, adipocytes within tissues were thought to act as reservoirs of energy, as thermal, or as structural support. In this review, we discuss recent studies revealing the cellular basis of the dynamic development and regenerative capacity of dermal adipocytes associated with the hair cycle and following injury. We discuss and speculate on potential roles of dermal adipocytes in cutaneous biology with an emphasis on communication during hair follicle growth and wound healing. Finally, we explore how alterations in the dermal adipose tissue may support clinical manifestations of cutaneous diseases such as lipodystrophy, obesity, and alopecia.