Cells store metabolic energy in the form of neutral lipids that are deposited within lipid droplets (LDs). In this study, we examine the biogenesis of LDs and the transport of integral membrane proteins from the endoplasmic reticulum (ER) to newly formed LDs. In cells that lack LDs, otherwise LD-localized membrane proteins are homogenously distributed in the ER membrane. Under these conditions, transcriptional induction of a diacylglycerol acyltransferase that catalyzes the formation of the storage lipid triacylglycerol (TAG), Lro1, is sufficient to drive LD formation. Newly formed LDs originate from the ER membrane where they become decorated by marker proteins. Induction of LDs by expression of the second TAG-synthesizing integral membrane protein, Dga1, reveals that Dga1 itself moves from the ER membrane to concentrate on LDs. Photobleaching experiments (FRAP) indicate that relocation of membrane proteins from the ER to LDs is independent of temperature and energy, and thus not mediated by classical vesicular transport routes. LD-localized membrane proteins are homogenously distributed at the perimeter of LDs, they are free to move over the LD surface and can even relocate back into the ER, indicating that they are not restricted to specialized sites on LDs. These observations indicate that LDs are functionally connected to the ER membrane and that this connection allows the efficient partitioning of membrane proteins between the two compartments.