Plant oils represent renewable sources of long-chain hydrocarbons that can be used as both fuel and chemical feedstocks, and genetic engineering offers an opportunity to create further high-value specialty oils for specific industrial uses. While many genes have been identified for the production of industrially important fatty acids, expression of these genes in transgenic plants has routinely resulted in a low accumulation of the desired fatty acids, indicating that significantly more knowledge of seed oil production is required before any future rational engineering designs are attempted. Here, we provide an overview of the cellular features of fatty acid desaturases, the so-called diverged desaturases, and diacylglycerol acyltransferases, three sets of enzymes that play a central role in determining the types and amounts of fatty acids that are present in seed oil, and as such, the final application and value of the oil. Recent studies of the intracellular trafficking, assembly and regulation of these enzymes have provided new insights to the mechanisms of storage oil production, and suggest that the compartmentalization of enzyme activities within specific regions or subdomains of the ER may be essential for both the synthesis of novel fatty acid structures and the channeling of these important fatty acids into seed storage oils.