Seipin, the human Berardinelli-Seip congenital lipodystrophy 2 (BSCL2) gene product, regulates adipocyte differentiation (systemic lipid storage) and lipid droplet (LD) formation (cellular lipid storage). BSCL2 is characterized by almost complete loss of adipose tissue, severe insulin resistance, hypertriglyceridemia and hepatic steatosis. The molecular function of seipin, however, remains to be elucidated. We use a number of model systems to study the role of seipin and its orthologues in lipid storage. Our results suggest that seipin functions in the metabolism of phospholipids, and that seipin deficiency causes accumulation of certain lipid species, such as phosphatidic acid. These accumulated lipids may interfere with PPARgamma function during adipocyte differentiation, causing severe lipodystrophy. These lipid species may also cause morphological changes of LDs in other cell types. Our results therefore provide important insights into adipocyte development, as well as the cellular dynamics of lipid droplets.