Evidence suggests that at a population level, childhood and adolescent obesity increase the long-term risk of chronic diseases such as type 2 diabetes and CVD. At an individual level, however, the metabolic consequences of obesity in youth vary immensely. Despite comparable BMI, some adolescents develop impaired glucose tolerance while others maintain normal glucose homeostasis. It has been proposed that the variation in the capacity to store lipid in the subcutaneous adipose tissue (SAT) may partially discriminate metabolically healthy from unhealthy obesity. In positive energy balance, a decreased capacity to expand SAT may drive lipid accumulation to visceral adipose tissue, liver and skeletal muscle. This state of lipotoxicity is associated with chronic low-grade inflammation, insulin resistance and dyslipidaemia. The present review examines the differential adipose tissue development and function in children and adolescents who exhibit metabolic dysregulation compared with those who are protected. Additionally, the role of manipulating dietary fat quality to potentially prevent and treat metabolic dysfunction in obesity will be discussed. The findings of the present review highlight the need for further randomised controlled trials to establish the effect of dietary n-3 PUFA on the metabolic phenotype of obese children and adolescents. Furthermore, using a personalised nutrition approach to target interventions to those at risk of, or those with established metabolic dysregulation may optimise the efficacy of modifying dietary fat quality.