S . P A T N A Y A K A N D A . S R E E . 2005.Aim: To screen bacterial associates from marine sponges for single cell oil (SCO)/polyunsaturated fatty acid (PUFA) production. Methods and Results: Using Sudan black 'B' staining technique the bacterial associates were screened for cellular lipid accumulation, effect of culture media, incubation period and C : N ratio. Extraction of the bacterial lipids was carried out by Floch's method and fatty acid methyl esters were analysed by GC and GC/MS. Four bacterial associates of 50 isolated from eight marine sponges tested positive for lipid accumulation. Two bacterial associates, viz. Bacillus subtilis (RRL-8) from Aurora globostellata and Pseudomonas spp. (RRL-28) from Heteronema erecta were found to produce total lipids 16AE9 and 31AE7%, respectively, of their dry biomass. Conclusions: Increase in C : N ratio significantly improved lipid production to 33AE4 and 42AE7%. Both the isolates produced c-linolenic acid (18 : 3 x6; 4AE5 and 1AE12% respectively), whereas B. subtilis showed 3AE8% of eicosapentaenoic acid (20 : 5 x3) along with branched chain fatty acids. Significance and Impact of the Study: This is the first report of oleaginous bacterial associates from marine sponges.