Neutral lipid is stored in spherical organelles called lipid droplets that are bounded by a coat of proteins. The protein that is most frequently found at the surface of lipid droplets is adipocyte differentiation-related protein (ADRP). In this study, we demonstrate that fusion of either the human or mouse ADRP coding sequences to green fluorescent protein (GFP) does not disrupt the ability of the protein to associate with lipid droplets. Using this system to identify targeting elements, discontinuous segments within the coding region were required for directing ADRP to lipid droplets. GFP-tagged protein was employed also to examine the behavior of lipid droplets in live cells. Time lapse microscopy demonstrated that in HuH-7 cells, which are derived from a human hepatoma, a small number of lipid droplets could move rapidly, indicating transient association with intracellular transport pathways. Most lipid droplets did not show such movement but oscillated within a confined area; these droplets were in close association with the endoplasmic reticulum membrane and moved in concert with the endoplasmic reticulum. Fluorescence recovery analysis of GFP-tagged ADRP in live cells revealed that surface proteins do not rapidly diffuse between lipid droplets, even in conditions where they are closely packed. This system provides new insights into the properties of lipid droplets and their interaction with cellular processes.