We present multiple findings on derangements in lipid metabolism in type 2 diabetes. The increase in the intracellular deposition of triglycerides (TG) in muscles, liver and pancreas in subjects prone to diabetes is well documented and demonstrated to attenuate glucose metabolism by interfering with insulin signaling and insulin secretion. The obesity often associated with type 2 diabetes is mainly central, resulting in the overload of abdominal adipocytes with TG and reducing fat depot capacity to protect other tissues from utilizing a large proportion of dietary fat. In contrast to subcutaneous adipocytes, the central adipocytes exhibit a high rate of basal lipolysis and are highly sensitive to fat mobilizing hormones, but respond poorly to lipolysis restraining insulin. The enlarged visceral adipocytes are flooding the portal circulation with free fatty acids (FFA) at metabolically inappropriate time, when FFA should be oxidized, thus exposing nonadipose tissues to fat excess. This leads to ectopic TG accumulation in muscles, liver and pancreatic beta-cells, resulting in insulin resistance and beta-cell dysfunction. This situation, based on a large number of observations in humans and experimental animals, confirms that peripheral adipose tissue is closely regulated, performing a vital role of buffering fluxes of FFA in the circulation. The central adipose tissues tend to upset this balance by releasing large amounts of FFA. To reduce the excessive fat outflow from the abdominal depots and prevent the ectopic fat deposition it is important to decrease the volume of central fat stores or increase the peripheral fat stores. One possibility is to downregulate the activity of lipoprotein lipase, which is overexpressed in abdominal relatively to subcutaneous fat stores. This can be achieved by gastrointestinal bypass or gastroplasty, which decrease dietary fat absorption, or by direct means that include surgical removal of mesenteric fat. Indirect treatment consists of the compliant application of drastic lifestyle change comprising both diet and exercise and pharmacotherapy that reduces mesenteric fat mass and activity. The first step should be an attempt to effectively induce a lifestyle change. Next comes pharmacotherapy including acarbose, metformin, PPARgamma, or PPARgammaalpha agonists, statins and orlistat, estrogens in postmenopausal women or testosterone in men. Among surgical procedures, gastric bypass has been proven to produce beneficial results in advance of other surgical techniques, the evidence basis of which still needs strengthening.