Lipid droplets (LDs) are dynamic organelles that store neutral lipids and play crucial roles in cellular lipid homeostasis. This review covers the mechanisms of LD biogenesis and turnover, lipid transfer at membrane contact sites, and the regulation of fatty acid flux in lipotoxicity and cell death. LDs are composed primarily of neutral lipids like triacylglycerols (TAGs) and steryl esters (SEs), with their composition varying depending on cell type and metabolic demands. LDs are formed through lipid phase separation driven by the conserved ER-resident protein seipin, which marks sites for LD biogenesis. LD proteins are classified into class I (ER-to-LD) and class II (cytoplasm-to-LD) based on their trafficking pathways. Lipolysis and lipophagy are key processes for accessing stored lipids, with ATGL, HSL, and MGL mediating lipolysis, and ATG2 and VPS13 family proteins facilitating lipophagy. LDs form contacts with various organelles, including the endoplasmic reticulum (ER) and mitochondria, through membrane contact sites (MCSs), where lipid transfer proteins (LTPs) play a crucial role. LD-MCSs are involved in both LD breakdown and biogenesis, with PLIN5 and MIGA2 being key tethering proteins. LDs also have context-specific roles in lipotoxicity, suppressing FA-induced ER stress and mitochondrial dysfunction, and protecting against ferroptosis by sequestering polyunsaturated FAs (PUFAs). However, LDs can also promote ferroptosis under certain conditions. The review highlights the expanding network of factors that mediate LD regulation and function, emphasizing the importance of considering cellular context.Lipid droplets (LDs) are dynamic organelles that store neutral lipids and play crucial roles in cellular lipid homeostasis. This review covers the mechanisms of LD biogenesis and turnover, lipid transfer at membrane contact sites, and the regulation of fatty acid flux in lipotoxicity and cell death. LDs are composed primarily of neutral lipids like triacylglycerols (TAGs) and steryl esters (SEs), with their composition varying depending on cell type and metabolic demands. LDs are formed through lipid phase separation driven by the conserved ER-resident protein seipin, which marks sites for LD biogenesis. LD proteins are classified into class I (ER-to-LD) and class II (cytoplasm-to-LD) based on their trafficking pathways. Lipolysis and lipophagy are key processes for accessing stored lipids, with ATGL, HSL, and MGL mediating lipolysis, and ATG2 and VPS13 family proteins facilitating lipophagy. LDs form contacts with various organelles, including the endoplasmic reticulum (ER) and mitochondria, through membrane contact sites (MCSs), where lipid transfer proteins (LTPs) play a crucial role. LD-MCSs are involved in both LD breakdown and biogenesis, with PLIN5 and MIGA2 being key tethering proteins. LDs also have context-specific roles in lipotoxicity, suppressing FA-induced ER stress and mitochondrial dysfunction, and protecting against ferroptosis by sequestering polyunsaturated FAs (PUFAs). However, LDs can also promote ferroptosis under certain conditions. The review highlights the expanding network of factors that mediate LD regulation and function, emphasizing the importance of considering cellular context.