Increased risk of fracture identified in obese children has led to a focus on the relationship between fat, bone, and the impact of obesity during skeletal development. Early studies have suggested that despite increased fracture risk, obese children have a higher bone mass. However, body size corrections applied to account for wide variations in size between children led to the finding that obese children have a lower total body and regional bone mass relative to their body size. Advances in skeletal imaging have shifted the focus from quantity of bone in obese children to evaluating the changes in bone microarchitecture that result in a change in bone quality and strength. The findings suggest that bone strength in the appendicular skeleton does not appropriately adapt to an increase in body size which results in a mismatch between bone strength and force from falls. Recent evidence points to differing influences of fat compartments on skeletal development—visceral fat may have a negative impact on bone which may be related to the associated adverse metabolic environment, while marrow adipose tissue may have an independent effect on trabecular bone development in obese children. The role of brown fat has received recent attention, demonstrating differences in the influence on bone mass between white and brown adipose tissues. Obesity results in a shift in growth and pubertal hormones as well as influences bone development through the altered release of adipokines. The change in the hormonal milieu provides an important insight into the skeletal changes observed in childhood obesity.