In obesity and dyslipidemia, the oversupply of fat to tissues not suited for lipid storage induces cellular dysfunction that underlies diabetes and cardiovascular disease (i.e., lipotoxicity). Of the myriad lipids that accrue under these conditions, sphingolipids such as ceramide or its metabolites are amongst the most deleterious because they disrupt insulin sensitivity, pancreatic β cell function, vascular reactivity, and mitochondrial metabolism. Remarkably, inhibiting ceramide biosynthesis or catalyzing ceramide degradation in rodents ameliorates many metabolic disorders including diabetes, cardiomyopathy, insulin resistance, atherosclerosis, and steatohepatitis. Herein we discuss and critically assess studies that identify sphingolipids as major contributors to the tissue dysfunction underlying metabolic pathologies, highlighting the need to further decipher the full array of benefits elicited by ceramide depletion.