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.