Ubiquitous yet unique, lipid droplets are intracellular organelles that are increasingly being recognized for their versatility beyond energy storage. Advances uncovering the intricacies of their biogenesis and the diversity of their physiological and pathological roles have yielded new insights into lipid droplet biology. Despite these insights, the mechanisms governing the biogenesis and functions of lipid droplets remain incompletely understood. Moreover, the causal relationship between the biogenesis and function of lipid droplets and human diseases is poorly resolved. Here, we provide an update on the current understanding of the biogenesis and functions of lipid droplets in health and disease, highlighting a key role for lipid droplet biogenesis in alleviating cellular stresses. We also discuss therapeutic strategies of targeting lipid droplet biogenesis, growth or degradation that could be applied in the future to common diseases, such as cancer, hepatic steatosis and viral infection. This Review outlines our current understanding of the biogenesis and functions of lipid droplets in health and disease, highlighting a key role for lipid droplet biogenesis in alleviating cellular stress. Key points: The primary roles of lipid droplet biogenesis are to alleviate cellular stress and maintain energy homeostasis. Excess accumulation of lipid droplets and mutations in genes associated with lipid droplets are implicated in a plethora of pathologies. Although they are beneficial to cell physiology under most conditions, lipid droplets might also exacerbate cytotoxicity and disease progression in certain disease settings. Therapies targeting lipid droplet biogenesis, growth and degradation might be promising avenues for treating cancer, viral infection and hepatic steatosis. [ABSTRACT FROM AUTHOR]