Overweight and obesity are associated with type 2 diabetes, non-alcoholic fatty liver disease, cardiovascular disease and cancer, but all fat is not equal, as storing excess lipid in subcutaneous white adipose tissue (SWAT) is more metabolically favorable than in visceral fat. Here, we uncover a critical role for mTORC2 in setting SWAT lipid handling capacity. We find that subcutaneous white preadipocytes differentiating without the essential mTORC2 subunit Rictor upregulate mature adipocyte markers but develop a striking lipid storage defect resulting in smaller adipocytes, reduced tissue size, lipid re-distribution to visceral and brown fat, and sex-distinct effects on systemic metabolic fitness. Mechanistically, mTORC2 promotes transcriptional upregulation of select lipid metabolism genes controlled by PPARγ and ChREBP, including genes that control lipid uptake, synthesis, and degradation pathways as well as Akt2, which encodes a major mTORC2 substrate and insulin effector. Further exploring this pathway may uncover new strategies to improve insulin sensitivity.