Apiotrichum curvatum ATCC 20509 (formerly Candida curvata D) is an oleaginous yeast that can accumulate large amounts of intracellular lipid when grown with excess carbon. Cells were incubated in nitrogen-limited, balanced, and carbon-free media, and cell composition, lipid metabolism, and activity of catalase as a marker enzyme for peroxisomes were measured in whole cells or in cell-free extracts. The organism accumulated 54% of its dry weight as intracellular lipid when grown under nitrogen limitation, and accumulated no more than half that amount when grown in balanced medium. When starved for carbon, cells utilized endogenous lipid and carbohydrate as carbon and energy sources. Intracellular carbohydrates also seemed to be used as intermediates for lipid accumulation and lipid turnover. Catalase activity was strongly induced when cells metabolized endogenous lipid. The lipid content of cells was inversely related to catalase activity and to protein or nitrogen content, but was not related to intracellular carbohydrate content. The presence and induction of peroxisomes were investigated in cultures grown under different conditions. The nature of the carbon and nitrogen sources in the growth medium greatly affected catalase activity. Cells grown on corn oil had very high catalase activity, but those grown on glucose, sucrose, or maltose had low activity. Catalase activity was generally greater in exponential-phase cells than in stationary-phase cells. High catalase activity was measured in cultures grown in media that supported poor growth. Peroxisomal fatty acid beta-oxidation was detected in cells grown on corn oil. Peroxisomes with a homogeneous matrix and core surrounded by a single-layer membrane were observed in corn oil-grown cells by electron microscopy. Staining with 3,3[superscript]'-diaminobenzidine revealed that catalase activity was located in peroxisomes. Peroxisomes from cells grown on corn oil were separated from other subcellular fractions in a discontinuous sucrose gradient. Major peaks of activity of fatty acid beta-oxidation and of two key enzymes in the glyoxylate cycle were found in fractions containing peroxisomes, but not in fractions corresponding to the mitochondria. Peroxisomal beta-oxidation showed equivalent activity with palmitoyl-CoA or n-octanoyl-CoA as substrate.