Obesity and type 2 diabetes are the most prevalent metabolic diseases in the western world and affect over 50% of the world’s population. During obesity non-adipose tissues such as the liver and skeletal muscle take up and store excess fatty acids (FA) as lipids such as triacylglycerols (TAG) and diacylglycerols (DAG). Excessive lipid storage in non-adipose tissues can result in the dysfunction of cellular processes and lead to programmed cell death (apoptosis). Lipid-induced apoptosis was investigated in the key glucoregulatory tissues, the liver and skeletal muscle. Lipid-induced apoptosis was detected in vitro in both hepatocytes and myotubes but was not detected in the livers or skeletal muscles of genetically obese mice or high-fat fed mice. Further investigation discovered despite exacerbated TAG accumulation, endoplasmic reticulum stress (ER) was not activated in the liver and pathways of cellular remodelling (proteolysis and autophagy) were not initiated in skeletal muscle. These studies demonstrated that the liver and skeletal muscle are adaptable to increased lipid storage in physiological models but not isolated cell culture systems. In vitro experiments demonstrated unsaturated FAs could protect hepatocytes from lipoapoptosis and it has been suggested this is due to driving FA accumulation into TAG lipid droplets. Adipose triglyceride lipase (ATGL) is one of the primary TAG lipases. To explore TAG metabolism in the liver, primary hepatocytes were derived from ATGL null mice and ATGL was over-expressed in the livers of chronically obese mice. / It was found that cellular FA uptake and TAG esterification was increased and TAG lipolysis and FA oxidation were decreased in the ATGL null hepatocytes. This resulted in exacerbated TAG and diacylglycerol (DAG) storage. The gene expression of metabolic regulators such as cytochrome c oxidase subunit 2 (COX2), medium chain acyl Co-A dehydrogenase (MCAD), peroxisome proliferators-activated receptor co-activator 1! (PGC1!), nuclear respiratory factor 1 (NRF1) and FA translocase/cluster of differentiation 36 (FAT/CD36) were increased in ATGL null hepatocytes compared with wild type hepatocytes, suggesting that the reduction in FA oxidation in the ATGL null hepatocytes was probably due to limited FA substrate availability. Interestingly, despite increased TAG and DAG, the hepatocytes remained insulin sensitive. To investigate hepatic ATGL over-expression an adenovirus containing an ATGL insert was injected into chronic high fat fed mice. Hepatic ATGL over-expression in the iii chronically obese mice reduced TAG, DAG and ceramide content in the liver. This resulted in improved hepatic insulin signalling and whole body insulin sensitivity. In summary, studies from this thesis suggested the use of in vitro systems are not a substitute for in vivo models when assessing the toxic effects of lipid oversupply, TAG accumulation may be a protective mechanism against cellular remodelling and programmed cell death, and increased ATGL expression in the liver can reduce hepatic steatosis and enhance whole body insulin sensitivity. Therefore, increasing hepatic ATGL expression could be a therapeutic approach to treat obesity and type 2 diabetes.