Digestion of lipids needs bile salts and pancreatic lipase. Digestion is partial. Long chain fatty acids are absorbed as micelles into the lymph vessels; then carried as chylomicrons in the blood from intestine to liver and adipose tissue. Short chain fatty acids are absorbed directly into the blood stream. In beta oxidation, 2 carbon units are successively removed. Beta oxidation takes place in mitochondria. The entry of fatty acid into mitochondria needs carnitine. Beta oxidation steps are dehydrogenation, hydration, dehydrogenation and cleavage. The first dehydrogenase needs FAD and the second dehydrogenase is dependent on NAD+. In beta oxidation, palmitic acid (16 carbons) will yield 106 ATP. Odd chain fatty acids finally yield 3 carbon propionic acid. It is finally made into succinyl CoA with the help of enzymes requiring biotin and vitamin B12. Fatty acid synthesis is taking place by a multi enzyme complex. Acetyl CoA carboxylase, a biotin requiring enzyme, is the rate limiting enzyme of the fatty acid synthesis. Fatty acid synthesis needs the co-enzyme NADPH, which is produced by the hexose phosphate shunt pathway. Insulin favors lipogenesis and glucagon has the opposite effect. Lipotropic factors (Lecithin, choline, methionine, vitamin E) will protect from fatty liver and cirrhosis. Acetoacetate is the primary ketone body while beta-hydroxy butyrate and acetone are secondary ketone bodies. They are synthesized exclusively by the liver mitochondria. Diabetes mellitus and starvation are the important causes of ketogenesis. Glucagon stimulates ketogenesis, while insulin suppresses ketogenesis. Ketone bodies in urine are detected by Rothera\'s test.