Diabetes is a disorder of lipid as well as glucose metabolism. The lack of insulin signaling, caused by either insulin deficiency in type 1 diabetes or insulin resistance in type 2 diabetes, disrupts lipid metabolism in part through effects on the process of de novo lipogenesis. This process requires the activity of fatty acid synthase (FAS), a multifunctional enzyme that synthesizes the saturated fatty acid palmitate from malonyl-CoA, acetyl-CoA, and NAPDH. Studies over the past decade have demonstrated that FAS has complex tissue-specific effects that are relevant to the complications of diabetes. In liver, FAS participates in the generation of an endogenous phospholipid ligand for PPARalpha, a transcription factor that promotes fatty acid oxidation and is the target of fibrate drugs used in clinical practice. In the hypothalamus, FAS controls feeding behaviors. At the vascular endothelium and at the intestinal epithelium, FAS is required for normal homeostasis by promoting the palmitoylation of endothelial nitric oxide synthase (eNOS) and mucin 2, respectively. In cardiac muscle and skeletal muscle, FAS alters calcium metabolism through effects on the membrane environment. In macrophages, FAS promotes inflammation and atherosclerosis. In adipose tissue, FAS regulates the conversion of beige adipocytes in part by generating ether lipid ligands for PPARgamma, a transcription factor required for adipogenesis. Pharmacological inhibitors of FAS have been demonstrated to treat diabetes in animal models. However, potentially detrimental effects of FAS inhibition in certain tissues limit this approach. Available evidence suggests that FAS channels lipids to specific intracellular sites, raising that possibility that modulating this process could treat diabetes complications such as retinopathy, vascular disease, and other disorders related to chronic inflammation.