Adult stem cells, also termed as somatic stem cells, are undifferentiated cells, detected among differentiated cells in a tissue or an organ. Adult stem cells can differentiate toward lineage specific cell types of the tissue or organ in which they reside. They also have the ability to differentiate into mature cells of mesenchymal tissues, such as cartilage, fat and bone. Despite the fact that the balance has been comprehensively scrutinized between adipogenesis and osteogenesis and between chondrogenesis and osteogenesis, few reviews discuss the relationship between chondrogenesis and adipogenesis. In this review, the developmental and transcriptional crosstalk of chondrogenic and adipogenic lineages are briefly explored, followed by elucidation of signaling pathways and external factors guiding lineage determination between chondrogenic and adipogenic differentiation. An in-depth understanding of overlap and discrepancy between these two mesenchymal tissues in lineage differentiation would benefit regeneration of high-quality cartilage tissues and adipose tissues for clinical applications.