Lipid droplets (LDs) store neutral lipids in their core as an energy source when nutrients are scarce. The center of an LD is hydrophobic, and hence it is surrounded by a phospholipid monolayer, unlike other organelles that have an aqueous interior and are bounded by a phospholipid bilayer. LDs arise from the ER, where neutral lipid synthesis enzymes are localized. A combination of biophysical analysis and modeling, in vitro reconstitution and cell biological analyses has provided a great deal of information over the past few years on the process of LD biogenesis from the ER. In addition to lipid composition, four protein families (seipin proteins, perilipins, FIT proteins and ER shaping proteins) are crucial for LD biogenesis. Recent studies have shown that LDs preferentially arise, along with peroxisomes, at special ER sites marked by the reticulon-like Pex30/MCTP2 protein. New functions for perilipins and FIT family proteins have been uncovered, and the cryo-electron microscopy structure of seipin coupled with high resolution imaging in cells has provided a more comprehensive picture of its function in LD biogenesis. Seipin, along with other proteins such as Rab18 and its effector NRZ, have been shown to carry out their functions at least in part through regulation of ER-LD contact sites, whose establishment and maintenance have emerged as an essential component of LD biogenesis and maturation.