Frieze patterns, as introduced by Coxeter in the 1970s, are closely related to cluster algebras without coefficients. A suitable generalization of frieze patterns, linked to cluster algebras with coefficients, has only briefly appeared in an unpublished manuscript by Propp. In this paper, we study these frieze patterns with coefficients systematically and prove various fundamental results, generalizing classic results for frieze patterns. As a consequence, we see how frieze patterns with coefficients can be obtained from classic frieze patterns by cutting out subpolygons from the triangulated polygons associated with classic Conway-Coxeter frieze patterns. We address the question of which frieze patterns with coefficients can be obtained in...