Fatty acyl esters of the yeast specific sterol, ergosterol, are exclusively stored in lipid particles. Under conditions of sterol deficiency, e.g., in the presence of terbinafine, an inhibitor of fungal squalene epoxidase, steryl esters are hydrolyzed, and sterols are set free for membrane formation. Lipid particles do not contain steryl-ester hydrolase activity themselves; the highest specific activity of this enzyme is found in the plasma membrane. Therefore, steryl esters have to be exported from lipid particles to their site of hydrolytic cleavage. This process of translocation and metabolic conversion was studied in vivo. Addition of nocodazole to terbinafine-treated cells did not disturb the mobilization of steryl esters, indicating that this process is not mediated by microtubuli-dependent vesicle flux. Under the influence of inhibitors of cellular energy production (azide and fluoride) and protein biosynthesis (cycloheximide) mobilization of steryl esters came to an halt. These results support the view that ongoing membrane proliferation may be a driving force for the release of sterols from steryl esters of lipid particles.