Infantile hemangioma is a benign vascular tumor that affects 4 to 10% of neonates. A unique feature of hemangiomas is the natural lifecycle, whereby the tumor rapidly grows and then spontaneously regresses to a fibrofatty residuum. We have shown that hemangiomas are derived from mutlipotential stem cells (hemSCs), which differentiate into endothelial cells during the early proliferating phase and into adipocytes during the later involutive phase. T-box 2 (TBX2) is a transcription factor involved in controlling cell-fate decisions, and is highly expressed during the proliferating phase of hemangioma development. We hypothesize that TBX2 expression would be high in hemSCs derived from human hemangiomas and inhibiting TBX2 would result in changes in hemSC differentiation potential. To test our hypothesis, we analyzed hemSCs for TBX2 mRNA and protein expression. We then used RNA interference and TBX2 overexpression to determine the effect of altering TBX2 levels on hemSC growth and differentiation. Our studies show that TBX2 is highly expressed in hemSCs compared with a panel of normal stem/progenitor cells and mature vascular cells. TBX2 knockdown completely abolished adipogenic differentiation of hemSCs without significantly altering growth. Furthermore, overexpression of TBX2 led to enhanced adipogenic differentiation ability possibly through induction of C/EBPß. From these findings, we believe that TBX2 is active in hemSCs and that TBX2 maintains adipogenic differentiation-competent state of hemSCs. These findings may be important in the development of better treatment options for hemangiomas to accelerate involution.