Macrophages are white blood cells of the immune system in both mammals and Drosophila. In addition to their roles in engulfing and killing microbial invaders by phagocytosis, these cells play important roles in embryonic development, tissue repair, metabolism, and maintenance of homeostasis. Under certain inflammatory conditions, mammalian macrophages accumulate lipids in the form of lipid droplets, including in infection, atherosclerosis, and obesity; however, neither the mechanisms nor purpose of this accumulation are well-understood. We have found the fly macrophages [plasmatocytes] also accumulate lipid droplets, with astonishing speed following bacterial infection: filling up to 30% of cell volume within 3 hrs of infection. We have discovered a completely novel mechanism for this inflammatory lipid accumulation: instead of synthesizing lipids from fatty acids or glucose taken up from the blood, fly macrophages obtain intact, micron-sized lipid droplets from the fat body, through a phagocytosis-like mechanism we term “phagoliposis”. By blocking the metabolism of these lipid droplets, we have discovered some unexpected inflammatory mechanisms fueled by these lipids.