One of the central tenets in obesity prevention and management is caloric restriction. This perspective presents salient features of how calories and energy balance matter, also called the "calories in, calories out" paradigm. Determinants of energy balance and relationships to dietary macronutrient content are reviewed. The rationale and features of the carbohydrate-insulin hypothesis postulate that carbohydrate restriction confers a metabolic advantage. According to this model, a large amount of fat intake is enabled without weight gain. Evidence concerning this possibility is detailed. The relationship and application of the laws of thermodynamics are then clarified with current primary research. Strong data indicate that energy balance is not materially changed during isocaloric substitution of dietary fats for carbohydrates. Results from a number of sources refute both the theory and effectiveness of the carbohydrate-insulin hypothesis. Instead, risk for obesity is primarily determined by total calorie intake.