Lipid droplets are lipid-rich, multifunctional organelles universally found across cell types. Substantial progress has advanced the current knowledge of lipid droplets and their connections with inflammation and other cellular stresses. In the central nervous system, the abnormal formation of lipid droplets and its association with apolipoprotein E (ApoE), a primary lipid-transporting protein, has been attracting growing scientific interest in the context of neuroinflammation and neurodegeneration. It is now recognized that, under toxicity conditions in the brain, ApoE modulates lipid droplet accumulation within the cytoplasm of glial cells, particularly microglia and astrocytes—major immune cells of the brain and crucial for neuronal health—which become activated and dysfunctional in regulating metabolic and immunoregulatory pathways. This chapter explores key aspects of lipid droplet and ApoE biology and their emerging intersections in diseases with an emphasis on immune cells and inflammation.