The study of sterol overproduction in tissues of LAB 1-4 mutant tobacco (Nicotiana tabacum L. cv Xanthi) (P. Maillot-Vernier, H. Schaller, P. Benveniste, G. Belliard [1989] Biochem Biophys Res Commun 165: 125-130) over several generations showed that the overproduction phenotype is stable in calli, with a 10-fold stimulation of sterol content when compared with wild-type calli. However, leaves of LAB 1-4 plants obtained after two steps of self-fertilization were characterized by a mere 3-fold stimulation, whereas calli obtained from these plants retained a typical sterol-overproducing mutant phenotype (i.e. a 10-fold increase of sterol content). These results suggest that the expression of the LAB 1-4 phenotype is dependent on the differentiation state of cells. Most of the sterols accumulating in the mutant tissues were present as steryl-esters, which were minor species in wild-type tissues. Subcellular fractionation showed that in both mutant and wild-type tissues, free sterols were associated mainly with microsomal membranes. In contrast, the bulk of steryl-esters present in mutant tissues was found in the soluble fraction of cells. Numerous lipid droplets were detected in the hyaloplasm of LAB 1-4 cells by cytochemical and cytological techniques. After isolation, these lipid granules were shown to contain steryl-esters. These results show that the overproduced sterols of mutant tissues accumulate as steryl-esters in hyaloplasmic bodies. The esterification process thus allows regulation of the amount of free sterols in membranes by subcellular compartmentation.