This study describes the effect of collagen type I (Col I) oxidation on its physiological remodeling by adipose tissue-derived mesenchymal stem cells (ADMSCs), both mechanical and proteolytic, as an in vitro model for the acute oxidative stress that may occur in vivo upon distinct environmental changes. Morphologically, remodeling was interpreted as the mechanical rearrangement of adsorbed FITC-labelled Col I into a fibril-like pattern. This process was strongly abrogated in cells cultured on oxidized Col I albeit without visible changes in cell morphology. Proteolytic activity was quantified utilizing fluorescence de-quenching (FRET effect). The presence of ADMSCs caused a significant increase in native FITC-Col I fluorescence, which was almost absent in the oxidized samples. Parallel studies in a cell-free system confirmed the enzymatic de-quenching of native FITC-Col I by Clostridial collagenase with statistically significant inhibition occurring in the oxidized samples. Structural changes to the oxidized Col I were further studied by differential scanning calorimetry. In the oxidized samples, an additional endotherm with sustained enthalpy (∆H) was observed at 33.6 °C along with Col I's typical one at 40.5 °C. Collectively, these data support that the remodeling of Col I by ADMSCs is altered upon oxidation due to intrinsic changes to the protein's structure, which represents a novel mechanism for the control of stem cell behavior.