Abstract: Lipid droplets (LDs) are central organelles for maintaining lipid homeostasis. However, how cells control the size and number of LDs remains largely unknown. Herein, we report that Ubx2, a UBX-domain-containing protein involved in endoplasmic reticulum (ER)-associated degradation, is crucial for LD maintenance. Ubx2 redistributes from the ER to LDs when LDs start to form and enlarge during diauxic shift and in the stationary phase. ubx2? cells contain abnormal numbers of LDs that are smaller than normal, and their triacylglycerol (TAG) is reduced to 50% of the normal level. Deletion of either the UBX or UBA domain in Ubx2 has no effect, but deletion of both causes LD phenotypes similar to that in ubx2?. The reduced level of TAG in ubx2? is probably the result of mislocalization of phospholipid:diacylglycerol acyltransferase (Lro1), one of the two TAG-synthesizing enzymes in yeast, which moves along the ER and distributes dynamically to the putative LD assembly sites abutting LDs. Thus, Ubx2 is important for the maintenance of cellular TAG homeostasis probably through Lro1. The mammalian Ubxd8 (also known as FAF2), when expressed in yeast, complements the defect of ubx2?, implying a functional conservation for these UBX-domain-containing proteins in lipid homeostasis.