The potent immunomodulatory function of mesenchymal stem/stromal cells (MSCs) elicited by proinflammatory cytokines IFN-g and TNF-a (IT) is critical to resolve inflammation and promote tissue repair. However, little is known about how the immunomodulatory capability of MSCs is related to their differentiation competency in the inflammatory microenvironment. In this study, we demonstrate that the adipocyte differentiation and immunomodulatory function of human adipose tissue-derived MSCs (MSC(AD)s) are mutually exclusive. Mitochondrial reactive oxygen species (mtROS), which promote adipocyte differentiation, were decreased in MSC(AD)s due to IT-induced upregulation of superoxide dismutase 2 (SOD2). Furthermore, knockdown of SOD2 led to enhanced adipogenic differentiation but reduced immunosuppression capability of MSC(AD)s. Interestingly, the adipogenic differentiation was associated with increased mitochondrial biogenesis and upregulation of peroxisome proliferator-activated receptor gamma coactivator-1 alpha (PPARGC1A/PGC-1a) expression. IT inhibited PGC-1a expression and decreased mitochondrial mass but promoted glycolysis in an SOD2dependent manner. MSC(AD)s lacking SOD2 were compromice. Taken together, these findings indicate that the adipogenic differentiation and immunomodulation of MSC(AD)s may compete for resources in fulfilling the respective bioflammatory microenvironment.