- Obesity promotes the biogenesis of adipose tissue (AT) foam cells (FC), which contribute to AT insulin resistance. Autophagy, an evolutionarily-conserved house-keeping process, was implicated in cellular lipid handling by either feeding and/or degrading lipid-droplets (LDs). We hypothesized that beyond phagocytosis of dead adipocytes, AT-FC biogenesis is supported by the AT microenvironment by regulating autophagy. Non-polarized (“M0”) RAW264.7 macrophages exposed to AT conditioned media (AT-CM) exhibited a markedly enhanced LDs biogenesis rate compared to control cells (8.3 Vs 0.3 LDs/cells/h, p < 0.005). Autophagic flux was decreased by AT-CM, and fluorescently following autophagosomes over time revealed ~ 20% decline in new autophagic vesicles' formation rate, and 60–70% decrease in autophagosomal growth rate, without marked alternations in the acidic lysosomal compartment. Suppressing autophagy by either targeting autophagosome formation (pharmacologically, with 3-methyladenine or genetically, with Atg12 ± Atg7-siRNA), decreased the rate of LD formation induced by oleic acid. Conversely, interfering with late autophago-lysosomal function, either pharmacologically with bafilomycin-A1, chloroquine or leupeptin, enhanced LD formation in macrophages without affecting LD degradation rate. Similarly enhanced LD biogenesis rate was induced by siRNA targeting Lamp-1 or the V-ATPase. Collectively, we propose that secreted products from AT interrupt late autophagosome maturation in macrophages, supporting enhanced LDs biogenesis and AT-FC formation, thereby contributing to AT dysfunction in obesity.