Purpose: To investigate if viable stem cells could be isolated and expanded from cryopreserved microfragmented adipose tissue (AT) harvested from patients with knee osteoarthritis. Methods: Microfragmented abdominal AT from knee osteoarthritis patients was cryopreserved at -80 °C in cryoprotectant-medium. The samples were thawed for stem cell isolation by tissue explant culture (TEC) and enzymatic digestion (ED), respectively. Viability, population doublings, and doubling time were assessed by trypan blue staining and flow cytometry. Cell type and senescence-associated β-galactosidase activity were analyzed by flow cytometry. Osteogenic and adipogenic differentiation was assessed quantitatively by Alizarin-Red-S and Oil-Red-O staining, respectively. Results: Microfragmented AT from 7 patients was cryopreserved for a period of 46–150 days (mean (SD) 115.9 days (44.3 days)). Viable stem cells were successfully recovered and expanded from all patients using both isolation methods with no significant difference in viable population doublings or doubling time from passage 1 to 3 (p > 0.05). Low levels of senescence-associated β-galactosidase activity was detected for both methods with no significant difference between TEC and ED (p = 0.17). Stemness was verified by stem cell surface markers and osteogenic and adipogenic differentiation performance. Adventitial stem cells (CD31⁻CD34⁺CD45⁻CD90⁺CD146⁻), pericytes (CD31⁻CD34⁻CD45⁻CD90⁺CD146⁺), transitional pericytes (CD31⁻CD34⁺CD45⁻CD90⁺CD146⁺), and CD271⁺ stem cells (CD31⁻CD45⁻CD90⁺CD271⁺) were identified using both methods. More pericytes were present when using TEC (25% (24%)) compared to ED (3% (2%)) at passage 4 (p = 0.04). Conclusions: Viable stem cells can be isolated and expanded from cryopreserved microfragmented AT using both TEC and ED. TEC provides more clinically relevant pericytes than ED.