In general, obesity is a state of high energy stores, high energy intake, and high energy expenditure. The high energy expenditure is largely due to the increased fat-free mass. The failure to find a positive relationship between reported energy intake and body size reflects a greater under-reporting of calorie intake among obese individuals. Obesity, therefore, develops as a consequence of a chronic imbalance between intake and expenditure, although the cause of this is not apparent from the energy balance equation. However, this equation can be dissected into its component nutrient balance equations because net de novo lipogenesis is negligible in free-living humans. Fat calories are handled very differently from non-fat calories. Non-fat nutrient oxidation rates rise and fall to match the fluctuations in non-fat intake so that non-fat calorie balance is actively maintained. In contrast, changes in fat intake do not acutely affect fat oxidation but are matched by changes in storage. Therefore, within the fat balance equation there is ample scope for a chronic imbalance between fat intake and oxidation. Also, there is some evidence that carbohydrate balance may be an important signal for hunger and satiety. These concepts imply that, under free-living, ad libitum eating conditions, changes in nutrient intake composition (e.g. an increased proportion of fat in the diet) or changes in nutrient oxidation composition (e.g. a decrease in the proportion of fat oxidized) will lead to body weight change (in these cases, to weight gain). Considering obesity as a consequence of normal physiology (with its normal variation between individuals) in a 'pathological' environment (high fat diet, low exercise) offers an important perspective for explaining the interpopulation and interindividual differences in obesity and for formulating treatment and prevention options. Low energy expenditure (relative to body size), high respiratory quotient and insulin sensitivity have been shown to be predictors of weight gain, although upon gaining weight these metabolic factors tend to 'normalize'. Metabolic responses to underfeeding or overfeeding are largely predictable from the changes in calorie intake and changes in body composition, but some adaptive changes may occur.