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Approximately 422 million people have diabetes worldwide (2014) and it is predicted that diabetes will rise by nearly 54% by 2030. Aerobic exercise is known to show positive effect on health of diabetic and pre diabetic patients. The effect of exercise has been studied extensively using plasma biochemistry but cellular data is scares. Previously, we have shown endothelial progenitor cells (EPCs) can act as a strong cellular biomarker of endothelial function following aerobic exercise as an intervention. In this study, we are examining the effect of aerobic exercise on adipocyte derived MSCs to study stromal cell differentiation and as a cellular surrogate of fat metabolism.Methods: Overweight and obese subjects (n=5) were enrolled in a 12 week exercise intervention study. The biweekly exercise sessions were supervised by a trained exercise physiologist and consisted of a 1 hour sessions that included warm-up and cool-down and 30 min of combined aerobic and resistance training at an exercise intensity of 50-80% of heart rate reserve. Physical and biochemical parameters were tested pre and post exercise. Subcutaneous abdominal fat biopsies were obtained and fat derived stromal cells were cultured in vitro for 2-3 weeks. MSCs were analyzed for mRNA gene expression (qRT-PCR) and cellular oxygen consumption rate (OCR), pre and post 12 week exercise.Results: With exercise, A1C reduced significantly. An increase of METs was also noticed post exercise. Both basal and maximal respiration increased significantly post exercise when compared with commercially obtained MSCs. Simultaneously, mitochondrial genes COX4 and ATP5B (p= 0.01, 1.4 fold, 0.02, 1.5 fold respectively), Glucose transporter, GLUT1 (p=0.04, 1.8 fold), antioxidants GPX3 and CAT (p= 0.01, 3.2 fold and p=0.04, 1.5 fold respectively) upregulated whereas pro-inflammatory cyclo-oxygenase-2 (p=0.04, 2.5 fold) gene reduced significantly, post exercise. Regarding differentiation potential of multipotent MSCs, post exercise, we noted enhanced expression of bone markers such Alkaline Phosphatase (p= 0.03, 2.7 fold) BGLAP and RUNX2 (1.3 and 1.2 fold) and also for collagen marker COL2 (2.4 fold) expression. For adipogenic differentiation potential PPARG mRNA expression was reduced. Interestingly, serum value of osteocalcin increased significantly from 15.0 (5.5) to 16.3(6.1) ng/ml (9% increase, p=0.03) with 1% increase in bone alkaline phosphatase level, post exercise.Conclusion: We conclude that exercise augments cellular glucose transporters (GLUT1), anti-oxidants and reduce MSC inflammation and up-regulates mitochondrial function and gene expression profile of MSCs. Increased serum value of osteocalcin complement increased gene expression of bone formation markers indicating a cross talk between fat derived MSCs and bone formation, post exercise.