Liposarcomas are rare malignant tumors of adipocytic differentiation. The classification of liposarcomas into four principal subtypes reflects the distinct clinical behavior, treatment sensitivity, and underlying biology encompassed by these diseases. Increasingly, clinical management decisions and the development of investigational therapeutics are informed by an improved understanding of subtype-specific molecular pathology. Well-differentiated liposarcoma is the most common subtype and is associated with indolent behavior, local recurrence, and insensitivity to radiotherapy and chemotherapy. Dedifferentiated liposarcoma represents focal progression of well-differentiated disease into a more aggressive, metastasizing, and fatal malignancy. Both of these subtypes are characterized by recurrent amplifications within chromosome 12, resulting in the overexpression of disease-driving genes that have been the focus of therapeutic targeting. Myxoid liposarcoma is characterized by a pathognomonic chromosomal translocation that results in an oncogenic fusion protein, whereas pleomorphic liposarcoma is a karyotypically complex and especially poor-prognosis subtype that accounts for less than 10% of liposarcoma diagnoses. A range of novel pharmaceutical agents that aim to target liposarcoma-specific biology are under active investigation and offer hope of adding to the limited available treatment options for recurrent or inoperable disease.