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Obesity has reached global epidemic proportions and it affects the development of insulin resistance, type 2 diabetes, fatty liver disease and other metabolic diseases. Membrane lipids are important structural and signaling components of the cell membrane. Recent studies highlight their importance in lipid homeostasis and are implicated in the pathogenesis of fatty liver disease. Here, we discuss the numerous membrane lipid species and their metabolites including, phospholipids, sphingolipids and cholesterol, and how dysregulation of their composition and physiology contribute to the development of fatty liver disease. The development of new genetic and pharmacological mouse models has shed light on the role of lipid species on various mechanisms/pathways; these lipids impact many aspects of the pathophysiology of fatty liver disease and could potentially be targeted for the treatment of fatty liver disease.