Tissue engineering and cell implantation therapies are gaining popularity because of their potential to repair and regenerate tissues and organs. To investigate the role of inflammatory cytokines and stem cells in the development of engineered tissues, we have characterized the nature and timing of cell populations forming new adipose tissue in a mouse tissue engineering chamber (TEC) and characterized the gene and protein expression of cytokines in the newly developing tissues. Mac Green mice or EGFP-labelled bone marrow mice (to identify the origin of the progenitor cells) were implanted with TEC for periods ranging from 0.5 days to 6 weeks. Tissues were collected at various time points and assessed for cytokine expression through ELISA and mRNA analysis or labeled for specific cell populations in the TEC. The contents of selected early time point chambers were explanted and cultured in vitro and labeled for different cell populations. Macrophage derived factors, such as MCP-1, appear to induce adipogenesis by recruiting macrophages and bone marrow-derived precursor cells to the TEC at early time points, with cells arising from the BMSC being integrated into the construct, followed by a second wave of non-bone marrow-derived progenitors. Gene expression analysis suggests that TNFα, LCN-2 and Interleukin 1ß are important in early stages of neo-adipogenesis. Increasing PDGF and VEGF expression at early time points correlates with preadipocyte proliferation and induction of angiogenesis. This study provides new information about key elements that are involved in early development of new adipose tissue.