Obesity represents a disruption in balancing fuel intake with energy expenditure in favor of energy conservation. Adiposity is known to be carefully regulated and, over time, highly resistant to major changes, raising questions about how energy homeostasis can become dysregulated in favor of fat accumulation. In obesity, the excess lipid accumulation represents a surfeit of energy, but those who are obese often experience rapid fatigue and decreased physical endurance, reflecting an energy deficiency. To develop an explanation for this apparent contradiction in energy homeostasis and the chronic overeating relative to energy used in obesity, a review of the literature was conducted. The resulting model of obesity is based on a growing body of research demonstrating that altered mitochondrial energy production, particularly in skeletal muscles, is a major anomaly capable of setting off a chain of metabolic events leading to obesity. Alterations in skeletal muscle mitochondria distribution and their oxidative and glycolytic energy capacities in obesity are described. The metabolic responses of obese and normal individuals to exercise are contrasted, and the effects of weight loss on energy production are presented. The effect of altered fat oxidation is considered in relation to energy regulation by the central nervous system and the development of major obesity comorbidities, including systemic inflammation, insulin resistance and diabetes, and cardiovascular disease. Recommendations for clinical intervention and additional research are proposed based on the model presented of impaired mitochondrial function in obesity.