Accumulation of lipid droplets (also known as lipid bodies or adiposomes) within leukocytes, epithelial cells, hepatocytes and other non-adipocytic cells is a frequently observed phenotype in infectious, neoplastic and other inflammatory conditions. Lipid droplet biogenesis is a regulated cellular process that culminates in the compartmentalization of lipids and of an array of enzymes, protein kinases and other proteins, suggesting that lipid droplets are inducible organelles with roles in cell signaling, regulation of lipid metabolism, membrane trafficking and control of the synthesis and secretion of inflammatory mediators. Enzymes involved in eicosanoid synthesis are localized at lipid droplets and lipid droplets are sites for eicosanoid generation in cells during inflammation and cancer. In this review, we discuss the current evidence related to the biogenesis and function of lipid droplets in cell metabolism and signaling in inflammation and cancer. Moreover, the potential of lipid droplets as markers of disease and targets for novel anti-inflammatory and antineoplastic therapies will be discussed.