Seipin, the human Berardinelli-Seip congenital lipodystrophy 2 (BSCL2) gene product, regulates adipocyte differentiation and lipid droplet (LD) formation. 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 yeast, fly, mammalian cells and mice as 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 lipid intermediates and alters the composition of membrane phospholipids. The accumulated lipid intermediates interfere with PPARgamma function during adipocyte differentiation, causing severe lipodystrophy. These intermediates also cause morphological changes of LDs in other cell types.