Abstract Dihydroxyacetone phosphate was converted to a lipid by guinea pig liver mitochondria in the presence of fatty acids, coenzyme A (CoA), ATP, and Mg++. The isolated product was identified as acyl dihydroxyacetone phosphate by its chemical and chromatographic properties. The structure of the product was confirmed by comparing the infrared spectra of synthetic and biosynthetic palmitoyl dihydroxyacetone phosphate. The requirement for fatty acid, CoA, and ATP could be replaced by acyl-CoA. When the rate of esterification was examined with different fatty acids, the highest rate was obtained with palmitic acid. At concentrations above 0.1 mm, unsaturated acids such as oleic and linoleic were incorporated at a much lower rate than were palmitic and stearic. Similar results were obtained when the rates of esterification with palmitoyl-, stearoyl-, and oleoyl-CoA were compared. Palmitoyl dihydroxyacetone phosphate was synthesized by mitochondria of brain, kidney, and heart, as well as liver. Biosynthesis of acyl dihydroxyacetone phosphate was also catalyzed by the liver microsomal fraction, but the selective incorporation of saturated fatty acids was not seen.