Dietary Guidelines have emerged over the past 30 years recommending that Americans limit their consumption of total fat and saturated fat as one way to reduce the risk of a range of chronic diseases. However, a low-fat diet is not a no-fat diet. Dietary fat clearly serves a number of essential functions. For example, maternal energy deficiency, possible exacerbated by very low-fat intakes (< 15% of energy), is one key determinant in the etiology of low birth weight. The debate continues over recommendations for limiting total fat and saturated fatty acid intake in children. Recent evidence indicates that diets with adequate energy providing less than 30% of energy from fat are sufficient to promote normal growth and normal sexual maturation. More attention needs to be devoted to the effect of dietary fat reduction on the nutrient density of children's diets. The association between dietary fat and CHD has been extensively studied. Diets high in saturated fatty acids and trans fatty acids increase LDL cholesterol levels, and in turn, the risk of heart disease. The relationship between high-carbohydrate/low-fat diets and CHD is more ambiguous because high-carbohydrate diets induce dyslipidemia in certain individuals. Obesity among adults and children is now of epidemic proportions in the United States. High-fat diets leading to excessive energy intakes are strongly linked to the increasing obesity in the United States. However, the prevalence of obesity has increased during the same time period that dietary fat intake (both in absolute terms and as a percentage of total dietary energy) has decreased. These trends suggest that a concomitant decrease in total dietary energy and modifications of other lifestyle factors, such as physical activity, also need to be emphasized. Obesity is also an independent risk factor for the development of diabetes. The current availability of fat-modified foods offers the potential for dietary fat reduction and treatment of the comorbidities associated with diabetes. However, to date, few studies have documented the effectiveness of fat-modified foods as part of a weight loss regimen or in reduction in CHD risks among individuals with diabetes mellitus. The association between total dietary fat and cancer is still under debate. While there is some evidence demonstrating associations between dietary fat intake and cancers of the breast, prostate, and colon, there are serious methodologic issues, including the difficulty in differentiating the effects of dietary fat independent of total energy intake. Reported total fat and saturated fatty acid intakes as a percentage of total energy have been declining over the past 30 years in the United States. Despite this encouraging trend, the majority of individuals--regardless of age--do not report consuming a diet that meets the levels of fat and saturated fatty acids recommended by the Dietary Guidelines for Americans. On a relative basis, saturated fat intake has gone down less than has total fat intake. Individuals of all ages who report consuming a diet with < or = 30% of energy from fat consistently have lower energy intakes. Given the increasing rates of obesity in the United States at an earlier and earlier age, dietary fat reduction may be an effective part of an overall strategy to balance energy consumption with energy needs. In each of the age/gender groups reporting consumption of < or = 30% of energy from fat and less than 10% of energy from saturated fatty acids, fat-modified foods play a more important role in their diets than for people who are consuming higher levels of fat and saturated fat. The data are clear than fat-modified foods make a more significant contribution to diets of consumers with low-fat intakes. While one cannot argue cause and effect from the results presented, the patterns of fat-modified foods/low-fat intakes are consistent. The focus on overall diet quality is often lost in the national obsession with lowering fat inta