Summary Lipid droplets (LDs) form at the surface of the endoplasmic reticulum (ER) in cells of fungi and animals. In algae, however, they appear to form at the surfaces of both the ER and plastids. To study the universality of this process, we observed LD formation in the filamentous green alga Klebsormidium nitens. Each cell of this alga contains one large petal-like chloroplast.Observations of cells stained with dipyrrometheneboron difluoride (BODIPY) revealed that small LD spots formed at the edge of the chloroplast in young cells, and the size of the spots increased as the chloroplast grew. The LD spots were distributed evenly on the chloroplast, and consequently, were distributed equally between the daughter chloroplasts after binary fission. In non-dividing starved cells, large LDs formed as the chloroplast degraded and the chlorophyll concentration decreased, suggesting that components of the chloroplast were converted into LDs as the chloroplast degraded. To examine the spatial relationships among LDs, the ER, and the chloroplast, we examined cells by microscopy after dihexyloxcacarbocyanideiodide (DiOC 6 ) single-staining, BODIPY-DiOC 6 double-staining, and Nile red-DiOC 6 double-staining. ERs were elongated and arranged along the edge of the chloroplast in young cells. The LDs were associated with the ER, but were absent from the area between the ER and the chloroplast. These results suggest that the ER plays an important role in LD formation in young dividing cells in the green alga. The dynamics of the ER in starved cells were obscured by the large LDs that filled the cytoplasm.