A particulate enzyme fraction from the Chlorophyta Prototheca zopfii catalysed the transfer of glucose-[U- 14C]from UDP-Glc-[U- 14C] to endogenous sterol acceptors and the esterification of steryl glucosides with fatty acids from an endogenous acyl donor. Glucose was the only sugar present, and it appeared to have the β-configuration. In the acylated derivatives the glucose-acyl linkage appeared in the C-6 position of glucose, as indicated by periodate oxidation. UDP-Glc:sterol glucosyltransferase was solubilized with detergent and purified 34-fold. The solubilized enzyme showed no specificity for the sterol but a high affinity for the sugar nucleotide UDP-Glc. Time-course incorporation into steryl glucoside (SG) and the acylderivative (ASG) indicated that SG was the precursor of ASG and that phosphatidyl ethanolamine stimulated the formation of the latter compound, presumably acting as acyl donor. A high sterol glucosylating activity was found in the Golgirich fraction. All this evidence indicates that steryl glucosides and their acylated derivatives were synthesized by algae. The early assumption that these compounds were not present in algae must be revised.