Aquaculture is the fastest growing food production sector and is expected to provide over 60% of the world's seafood by 2030. Lipids represent the major energy contribution in aquaculture nutrition, and as such, reach high inclusion levels in energy–dense aquafeeds. Lipids are a prominently studied nutrient in aquaculture, since they supply energy and essential fatty acids and because of the unique abundance of the ω3 long-chain polyunsaturated fatty acids that are found in fish. Lipids from fish are well known to have positive impacts on human health, and as such, the transfer of lipids from the diet to fish to consumer is of great importance. Therefore, the fats and oils that are supplied for the health, growth, and development of aquaculture fish must be of good quality and sourced sustainably for the future of aquaculture production. This article describes the role of fats and oils in aquafeeds. In order to understand how the fats and oils are utilized, this article reviews the lipid and fatty acid requirements, lipid digestibility, and lipid synthesis of aquaculture fish. It also describes the most common fats and oils that are used in aquafeed formulations, as well as novel, innovative lipid sources, and new methods of formulating fatty acids in aquafeeds. The different lipid and fatty acid compositions of these fat and oil sources in the diet can directly impact the nutritional and product quality of farmed fish. The practical consideration for using high levels of dietary lipid in aquafeeds is the feed quality, particularly considering lipid oxidation.