Knee osteoarthritis (OA) is an immunological disease that compromises joint tissue homeostasis. Epidemiological data has implicated the adipogenic complications of diabetes in the increased incidence of OA in diabetic patients. However, the impaired immunomodulation by diabetic infrapatellar fat pads (IPFP) remains uncharacterized. Here, we model the arthritic IPFP, as part of the first ever microJoint (mJoint), via cocultures of diabetic and non-diabetic adipose-derived stem cells (ASCs) and macrophages, effector cells of the innate immune system. In 2D, macrophages and ASCs separated by permeable membranes communicated exclusively via paracrine extracellular secretions. Subsequent experiments ensued within 3D methacrylated gelatin hydrogels, with physiological and mechanical properties akin to the in vivo microenvironment. In 2D, trends in RT-qPCR indicate a difference in the immunomodulation of diabetic and nondiabetic IPFP ASCs. This suggests that the concerted manifestation of OA and diabetes is, in part, attributed to altered paracrine signaling within the IPFP.