Obesity is a critical risk factor for type 2 diabetes (T2D) and its prevalence is rising globally. White adipose tissue (WAT) plays a crucial role in regulating systemic energy homeostasis, but its expansion through hypertrophy and hyperplasia can lead to obesity-associated metabolic complications. In metabolically unhealthy obesity, the storage capacity of subcutaneous adipose tissue (SAT) is limited, leading to ectopic lipid accumulation in tissues like the liver, skeletal muscle, and heart, a condition known as "lipotoxicity." This accumulation triggers local inflammation and insulin resistance (IR), contributing to chronic low-grade inflammation and the progression of IR. The review highlights the current understanding of WAT dysfunction in obesity and its associated metabolic abnormalities, emphasizing the need for a better understanding of the mechanisms regulating adipose tissue expansion to develop effective therapeutic approaches. Key mechanisms include adipose tissue remodeling, impaired adipogenesis, chronic inflammation, and ectopic fat accumulation, which collectively contribute to the development of obesity-related metabolic complications.Obesity is a critical risk factor for type 2 diabetes (T2D) and its prevalence is rising globally. White adipose tissue (WAT) plays a crucial role in regulating systemic energy homeostasis, but its expansion through hypertrophy and hyperplasia can lead to obesity-associated metabolic complications. In metabolically unhealthy obesity, the storage capacity of subcutaneous adipose tissue (SAT) is limited, leading to ectopic lipid accumulation in tissues like the liver, skeletal muscle, and heart, a condition known as "lipotoxicity." This accumulation triggers local inflammation and insulin resistance (IR), contributing to chronic low-grade inflammation and the progression of IR. The review highlights the current understanding of WAT dysfunction in obesity and its associated metabolic abnormalities, emphasizing the need for a better understanding of the mechanisms regulating adipose tissue expansion to develop effective therapeutic approaches. Key mechanisms include adipose tissue remodeling, impaired adipogenesis, chronic inflammation, and ectopic fat accumulation, which collectively contribute to the development of obesity-related metabolic complications.