Although sterol carrier protein-2 (SCP-2; also called nonspecific lipid transfer protein) binds fatty acids and fatty acyl-CoAs, its role in fatty acid metabolism is not fully understood. L-cell fibroblasts stably expressing SCP-2 were used to resolve the relationship between SCP-2 intracellular location and fatty acid transacylation in the endoplasmic reticulum. Indirect immunofluorescence double labeling and laser scanning confocal microscopy detected SCP-2 in peroxisomes > endoplasmic reticulum > mitochondria > lysosomes. SCP-2 enhanced incorporation of exogenous [(3)H]oleic acid into phospholipids and triacylglycerols of overexpressing cells 1.6- and 2.5-fold, respectively, stimulated microsomal incorporation of [1-(14)C]oleoyl-CoA into phosphatidic acid in vitro 13-fold, and exhibited higher specificity for unsaturated versus saturated fatty acyl-CoA. SCP-2 enhanced the rate-limiting step in microsomal phosphatidic acid biosynthesis mediated by glycerol-3-phosphate acyltransferase. SCP-2 also enhanced microsomal acyl-chain remodeling of phosphatidylethanolamine up to fivefold and phosphatidylserine twofold, depending on the specific fatty acyl-CoA, but had no effect on other phospholipid classes. In summary, these results were consistent with a role for SCP-2 in phospholipid synthesis in the endoplasmic reticulum.