The differentiation of preadipocytes into mature adipocytes is accompanied by the formation of a giant, unilocular lipid droplet (LD). Mechanistically, however, LD biogenesis and adipogenesis are two distinct processes. Congenital generalized lipodystrophy, also known as Berardinelli-Seip congenital lipodystrophy (BSCL), is characterized by a near complete loss of adipose tissue, severe insulin resistance and hepatic steatosis. BSCL1 encodes a metabolic enzyme, 1-acylglycerol-3-phosphate O-acyltransferase 2/AGPAT2, and BSCL2 encodes seipin, a protein of unknown molecular function. We demonstrate that both AGPAT2 and seipin are required for the normal biogenesis of LDs, in addition to their essential role in adipogenesis. Mechanistically, both AGPAT2 and seipin function to maintain the normal level/distribution of phosphatidic acid in the endoplasmic reticulum (ER) and the inner nuclear membrane: seipin inhibits the activity of ER-localized glycerol-3-phosphate O-acyltransferases 3/4 (GPAT3/4) whereas AGPAT2 promotes the stability and activity of CDP-diacylglycerol synthases. Our results suggest that the level and distribution of phospholipids, e.g., phosphatidic acid, play important roles in both LD biogenesis and adipogenesis.