Arrhythmogenic right ventricular cardiomyopathy (ARVC) is a genetic disorder of desmosomal and structural proteins that is characterized by fibro-fatty infiltrate in the ventricles and fatal arrhythmia that can occur early before significant structural abnormalities. Most ARVC mutations interfere with β-catenin–dependent transcription that enhances adipogenesis; however, the mechanistic pathway to arrhythmogenesis is not clear. We hypothesized that adipogenic conditions play an important role in the formation of arrhythmia substrates in ARVC. Cardiac myocyte monolayers co-cultured for 2–4 days with mesenchymal stem cells (MSC) were derived from human-induced pluripotent stem cells with the ARVC5 TMEM43 p.Ser358Leu mutation. The TMEM43 mutation in myocyte co-cultures alone had no significant effect on impulse conduction velocity (CV) or APD. In contrast, when co-cultures were exposed to pro-adipogenic factors for 2–4 days, CV and APD were significantly reduced compared to controls by 49% and 31%, respectively without evidence of adipogenesis. Additionally, these arrhythmia substrates coincided with a significant reduction in IGF-1 expression in MSCs and were mitigated by IGF-1 treatment. These findings suggest that the onset of enhanced adipogenic signaling may be a mechanism of early arrhythmogenesis, which could lead to personalized treatment for arrhythmias associated with TMEM43 and other ARVC mutations.