Infections are a major complication of obesity, but the mechanisms responsible for impaired defense against microbes are not well understood. Here, we found that adipocyte progenitors were lost from the dermis during diet-induced obesity (DIO) in humans and mice. The loss of adipogenic fibroblasts from mice resulted in less antimicrobial peptide production and greatly increased susceptibility to Staphylococcus aureus infection. The decrease in adipocyte progenitors in DIO mice was explained by expression of transforming growth factor-β (TGFβ) by mature adipocytes that then inhibited adipocyte progenitors and the production of cathelicidin in vitro. Administration of a TGFβ receptor inhibitor or a peroxisome proliferator-activated receptor-γ agonist reversed this inhibition in both cultured adipocyte progenitors and in mice and subsequently restored the capacity of obese mice to defend against S. aureus skin infection. Together, these results explain how obesity promotes dysfunction of the antimicrobial function of reactive dermal adipogenesis and identifies potential therapeutic targets to manage skin infection associated with obesity.