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Osteoarthritis (OA) is a degenerative joint disease resulting in limited mobility and severe disability. Type II diabetes mellitus (T2D) is a weight-independent risk factor for OA, but a link between the two diseases has not been elucidated. Adipose stem cells (ASCs) isolated from the infrapatellar fat pad (IPFP) may be a viable regenerative cell for OA treatment. This study analyzed the expression profiles of inflammatory and adipokine-related genes in IPFP-ASCs of non-diabetic (Non-T2D), pre-diabetic (Pre-T2D), and T2D donors. Pre-T2D ASCs exhibited a substantial decrease in levels of mesenchymal markers CD90 and CD105 with no change in adipogenic differentiation compared to Non-T2D and T2D IPFP-ASCs. In addition, Cyclooxygenase-2 (COX-2), Forkhead box G1 (FOXG1) expression and prostaglandin E2 (PGE2) secretion were significantly increased in Pre-T2D IPFP-ASCs upon stimulation by interleukin-1 beta (IL-1β). Interestingly, M1 macrophages exhibited a significant reduction in expression of pro-inflammatory markers TNFα and IL-6 when co-cultured with Pre-T2D IPFP-ASCs. These data suggest that the heightened systemic inflammation associated with untreated T2D may prime the IPFP-ASCs to exhibit enhanced anti-inflammatory characteristics via suppressing the IL-6/COX-2 signaling pathway. In addition, the elevated production of PGE2 by the Pre-T2D IPFP-ASCs may also suggest the contribution of pre-diabetic conditions to the onset and progression of OA.