Obesity does not necessarily imply disease and similarly obese individuals may manifest obesity-related morbidity or seemingly be in reasonably good health. Recent studies have shown that patterns of lipid partitioning are a major determinant of the metabolic profile and not just obesity per se. The underlying mechanisms and clinical relevance of lipid deposition in the visceral compartment and in insulin-sensitive tissues are described. Increased intramyocellular lipid deposition impairs the insulin signal transduction pathway and is associated with insulin resistance. Increased hepatic lipid deposition is similarly associated with the majority of the components of the insulin resistance syndrome. The roles of increased circulating fatty acids in conditions of insulin resistance and the typical pro-inflammatory milieu of specific obesity patterns are provided. Insights into the patterns of lipid storage within the cell are provided along with their relation to changes in insulin sensitivity and weight loss.