The obesity crisis in the United States has been associated with an alarming increase in the prevalence of the metabolic syndrome (MSX) disease cluster. Here we review evidence that the MSX reflects a failure of a system of intracellular lipid homeostasis that prevents lipotoxicity in the organs of overnourished individuals by confining the lipid overload to cells specifically designed to store large quantities of surplus calories, the white adipocytes. Normally, early in obesity, adipocytes increase leptin and adiponectin secretion, hormones that enhance oxidation of surplus liquids in nonadipose tissues by activating AMP-activated protein kinase and reducing the activity and expression of lipogenic enzymes. These events combine to lower malonyl coenzyme A. Deficiency of and/or unresponsiveness to leptin prevents these protective events and results in ectopic accumulation of lipids. Increased de novo ceramide formation is probably the most damaging lipid and is a cause of lipoapoptosis, abetted by a decline in tissue Bcl-2. Pancreatic β-cells and myocardiocytes are cellular victims of the process, leading to non-insulin-dependent diabetes and lipotoxic cardiomyopathy. The MSX is particularly prevalent in visceral obesity, probably because visceral adipocytes make less leptin than sc adipocytes. Cushing’s syndrome, the lipodystrophy associated with protease inhibitor therapy of AIDS, polycystic ovarian disease, as well as diet-induced visceral obesity, all have a high waist/hip ratio, and all exhibit MSX. Increased lipid content in the heart and skeletal muscle organs of such patients is now under study.