Gradual replacement of contractile myofibers with non-contractile fibro-fatty infiltrate is a hallmark of muscular dystrophies and other chronic myopathies. While the development and persistence of these infiltrates is not fully understood, muscle-resident fibro-adipogenic progenitor cells (FAPs) have been implicated due to their ability to differentiate into fibroblasts and adipocytes. Although fibrosis is necessary to some extent for normal muscle repair, fatty replacement in muscle serves only as a detriment to its function and represents a critical area of need in preventing the pathological breakdown of muscle function seen in muscular dystrophies. Identifying druggable targets to reverse or prevent adipogenic differentiation of FAPs could have a profound impact in slowing or reversing the disease course for people living with various muscular dystrophies. Here we present the development of an assay to enable a small molecule screen using adipose-derived mesenchymal stem cells (A-MSCs) that aims to identify potential targets for inhibiting adipogenic differentiation of FAPs in dystrophic muscle. A-MSCs were selected being highly scalable, having a similar gene expression profile to FAPs undergoing adipogenic differentiation, and maintaining their multipotency during passaging. We have optimized differentiation protocols, integrated automated workflows, constructed an image classification metric, and identified positive controls against adipogenesis to facilitate a screen for identification of anti-adipogenic markers to translate into clinically-relevant models. By identifying targets which regulate adipogenic differentiation, this ongoing work will help us to elucidate major mechanisms for the pathogenic remodeling inherent to dystrophic muscle tissue. Importantly, this will further the potential to generate novel treatments for people living with devastating muscle disorders.