Phosphatidic acid phosphatase (PAP) catalyses the committed step of triacylglycerol (TAG) biosynthesis and thus regulates the amounts of TAG produced by the cell. TAG is the target of biotechnological processes developed for the production of food lipids or biofuels. These processes are using oleaginous microorganisms like the yeast Yarrowia lipolytica as the TAG producers. Thus manipulating key enzymatic activities like PAP in Y. lipolytica could drive lipid biosynthesis towards TAG production and increase TAG yields. In this study, PAP activity in Y. lipolytica was characterized in detail and its role in lipid biosynthesis was addressed. PAP activity increased 2.5-fold with the addition of Mg (1 mm) in the assay mixture, which means that most of the PAP activity was due to Mg -dependent PAP enzymes (e.g. Pah1, App1). In contrast, N-ethylmaleimide (NEM) potently inhibited PAP activity, indicating the presence of NEM-sensitive PAP enzymes (e.g. App1, Lpp1). Localization studies revealed that the majority of PAP activity resides in the membrane fraction, while the cytosolic fraction harbours only a small amount of activity. PAP activity was regulated in a growth-dependent manner, being induced at the early exponential phase and declining thereafter. PAP activity did not correlate with TAG synthesis, which increased as cells progressed from the exponential phase to the early stationary phase. In stationary phase, TAG was mobilized with the concomitant synthesis of sterols and sterol esters. These results provide the first insights into the role of PAP in lipid biosynthesis by Y. lipolytica. Copyright © 2016 John Wiley & Sons, Ltd.