Neurodegenerative diseases (NDDs) are characterised by the progressive loss of neurons in the central nervous system (CNS), resulting in memory impairment, cognition abnormalities, and motor dysfunctions. The common pathological features include altered energy metabolism, neuroinflammation, loss of neurons, aberrant protein aggregation, and synaptic dysfunction. Lipids, fundamental components of cell membranes play a critical role in energy storage and cell signaling. The brain, comprising approximately 60% lipid content by dry weight, underscores the significance of lipid dynamics in maintaining CNS integrity. Variations in lipid distribution across brain regions further highlight their specialised functions. Dysregulation of lipid metabolism, encompassing synthesis, transport, and utilization, has been implicated in the pathogenesis of neurodegenerative diseases. Lipid droplets (LDs), key intermediates of lipid metabolism, accumulate in neurons, microglia, and astrocytes, particularly in aging brains. The deposition of these LDs disrupts cellular homeostasis and links the dynamics of LDs to pathology of disease. Therefore, this review explores the pivotal role of lipid metabolism and LDs in NDDs, providing insights into their contributions to neuronal dysfunction and potential therapeutic implications.