Diseases affecting adipose tissue (AT) function include obesity, lipodystrophy, and lipedema, among others. Both a lack of and excess AT are associated with increased risk for developing diseases including type 2 diabetes mellitus, hypertension, obstructive sleep apnea, and some types of cancer. However, individual risk of developing cardiometabolic and other 'obesity-related' diseases is not entirely determined by fat mass. Rather than excess fat accumulation, AT dysfunction may represent the mechanistic link between obesity and comorbid diseases. There are people who remain metabolically healthy despite obesity, whereas people with normal weight or very low subcutaneous AT mass may develop typically obesity-related diseases. AT dysfunction is characterized by adipocyte hypertrophy, impaired subcutaneous AT expandability (ectopic fat deposition), hypoxia, a variety of stress, inflammatory processes, and the release of proinflammatory, diabetogenic, and atherogenic signals. Genetic and environmental factors might contribute to AT heterogeneity either alone or via interaction with intrinsic biological factors. However, many questions remain regarding the mechanisms of AT dysfunction initiation and whether and how it could be reversed. Do AT signatures define clinically relevant subtypes of obesity? Is the cellular composition of AT associated with variation in obesity phenotypes? What roles do environmental compounds play in the manifestation of AT dysfunction? Answers to these and other questions may explain AT disease mechanisms and help to define strategies for improving AT health. This review focuses on recent advances in our understanding of AT biology.