The related disorders of obesity and diabetes are increasing to epidemic proportions. The role of neutral lipid storage and hydrolysis, and hence the adipocyte, is central to understanding this phenomenon. The adipocyte holds the major source of stored energy in the body in the form of triacylglycerols (TAG). It has been known for over 35 years that the breakdown of TAG and release of free (unesterified) fatty acids and glycerol from fat tissue can be regulated by a cAMP‐mediated process. However, beyond the initial signaling cascade, the mechanistic details of this lipolytic reaction have remained unclear. Work in recent years has revealed that both hormone‐sensitive lipase (HSL), generally thought to be the rate‐limiting enzyme, and perilipin, a lipid droplet surface protein, are required for optimal lipid storage and fatty acid release. There are multiple perilipin proteins encoded by mRNA splice variants of a single perilipin gene. The perilipin proteins are polyphosphorylated by protein kinase A and phosphorylation is necessary for translocation of HSL to the lipid droplet and enhanced lipolysis. Hence, the surface of the lipid storage droplet has emerged as a central site of regulation of lipolysis. This review will focus on adipocyte lipolysis with emphasis on hormone signal transduction, lipolytic enzymes, the lipid storage droplet, and fatty acid release from the adipocyte. IUBMB Life, 56: 379‐385, 2004