Although most mycobacterial lipids are thought to be associated with the cell envelope, the authors previously observed substantial deposits of intracellular lipophilic material. A Nile-red-based cytological assay was used to determine factors which affect the presence and natural history of intracellular lipophilic inclusions (ILIs) in Mycobacterium smegmatis. Development of ILIs was associated with stationary-phase cultures in broth and with aged (6 days) colonies on agar. Using variants of Youmans' defined medium, the frequency and size of ILIs was observed to be minimal in carbon-poor medium. ILIs were observed to form within 15 min after provision of fatty acids to the medium and after a period of several days in nitrogen-poor medium. Analysis of the non-polar lipid extracts of ILI-rich and -poor preparations indicated that the triacylglycerols (TAGs) were a major component of the inclusions. The acyl substituents of the TAGs varied according to whether they were formed in Middlebrook 7H9 broth, in low-nitrogen Youmans' broth or rapidly after oleic acid supplementation of Youmans' broth. These studies support a storage function for TAGs in mycobacteria in addition to their previously suggested occurrence as components of the cell envelope. To assess a possible role for ILIs in Mycobacterium tuberculosis, a combined acid-fast (Auramine)/Nile red assay was applied to heavily positive sputum samples from patients with tuberculosis. Strong intracellular Nile red signals were obtained from acid-fast cells, indicating that ILI occur in M. tuberculosis in vivo. This may reflect a distinct physiological state of these cells, which it has not been possible to reproduce in vitro. These findings indicate that the uptake of long-chain fatty acids and TAG biosynthetic and degradative pathways are important aspects of mycobacterial lipid metabolism, meriting further investigation.