The biochemical explanation for lipid accumulation was investigated principally in Candida 107 and, for comparison, in the non-oleaginous yeast Candida utilis. There were no significant differences between these two yeasts in their control of glucose uptake; in both yeasts, the rates of glucose uptake were independent of the growth rate and were higher in carbon-limited chemostat cultures than in nitrogen-limited cultures. There was no lipid turnover in either yeast, as judged from [14C]acetate uptake and subsequent loss of 14C from the lipid of steady-state chemostat cultures. Acetyl-CoA carboxylase from both yeasts was similar in most characteristics except that from Candida 107 was activated by citrate (40% activation at 1 mM). The enzyme from Candida 107 was relatively unstable and, when isolated from nitrogen-limited (lipid-accumulating) cultures, was accompanied by a low molecular weight inhibitor. The reason for lipid accumulation is attributed to the decrease in the intracellular concentration of AMP as cultures become depleted of nitrogen. As the NAD+-dependent isocitrate dehydrogenase of Candida 107, but not C. utilis, requires AMP for activity, the metabolism of citrate through the tricarboxylic acid cycle in the mitochondria becomes arrested. In Candida 107, but not in C. utilis, there is an active ATP:citrate lyase which converts the accumulating citrate, when it passes into the cytosol, into acetyl-CoA and oxaloacetate. The former product is then available for fatty acid biosynthesis which is stimulated by the high ATP concentration within the cells, by the activation of acetyl-CoA carboxylase by citrate and by the provision of NADPH generated as oxaloacetate is converted via malate to pyruvate. Similar characteristics were evident in oleaginous strains of Rhodotorula glutinis and Mucor circinelloides but not in non-oleaginous representatives of these species.