A tropical marine strain of Yarrowia lipolytica, NCIM 3589 produced emulsifier in the presence of alkanes or crude oil. The mode of alkane uptake in this organism was by attachment to large droplets. An emulsifier (lipid-carbohydrate-protein) complex was associated with the cell wall. This emulsifier increased the hydrophobicity of the cells during the growth phase. In the stationary phase, the organism produced the emulsifier extracellularly under conditions of carbon excess and nitrogen limitation. Other requirements for extracellular emulsifier production included an initial pH of 8.0 and the presence of sodium chloride at a concentration of 2 to 3% (342 to 513 mM). The cell-associated and extracellular emulsifier was shown to have similar properties.