Elevated concentrations of plasma fatty acids in transition dairy cows are significantly associated with increased disease susceptibility and poor lactation performance. The main source of plasma fatty acids throughout the transition period is lipolysis from adipose tissue depots. During this time, plasma fatty acids serve as a source of calories mitigating the negative energy balance prompted by copious milk synthesis and limited dry matter intake. Past research has demonstrated that lipolysis in the adipose organ is a complex process that includes not only the activation of lipolytic pathways in response to neural, hormonal, or paracrine stimuli, but also important changes in the structure and cellular distribution of the tissue in a process known as adipose tissue remodeling. This process involves an inflammatory response with immune cell migration, proliferation of the cellular components of the stromal vascular fraction, and changes in the extracellular matrix. This review summarizes current knowledge on lipolysis in dairy cattle, expands on the new field of adipose tissue remodeling, and discusses how these biological processes affect transition cow health and productivity.