Efficient removal of fibrillar collagen is essential for adaptive subcutaneous adipose tissue (SAT) expansion that protects against ectopic lipid deposition during weight gain. Here, we used mice to further define the mechanism for this collagenolytic process. We show that loss of collagen type-1 (CT1) and increased CT1-fragment levels in expanding SAT are associated with proliferation of resident M2-like macrophages that display increased CD206-mediated engagement in collagen endocytosis compared to chow-fed controls. Blockage of CD206 during acute high-fat diet-induced weight gain leads to SAT CT1-fragment accumulation associated with elevated inflammation and fibrosis markers. Moreover, these SAT macrophages’ engagement in collagen endocytosis is diminished in obesity associated with elevated levels collagen fragments that are too short to assemble into triple helices. We show that such short fragments provoke M2-macrophage proliferation and fibroinflammatory changes in fibroblasts. In conclusion, our data delineate the importance of a macrophage-collagen fragment axis in physiological SAT expansion. Therapeutic targeting of this process may be a means to prevent pathological adipose tissue remodeling, which in turn may reduce the risk for obesity-related metabolic disorders.