Fatty acid-induced triacylglycerol synthesis produces triacylglycerol droplets with a protein coat that includes perilipin 3/TIP47 and perilipin 4/S3-12. This study addresses the following two questions. Where do lipid droplets emerge, and how are their coat proteins recruited? We show that perilipin 3- and perilipin 4-coated lipid droplets emerge along the endoplasmic reticulum (ER). Blocking membrane trafficking with AlF(4)(-) during fatty acid-induced triacylglycerol synthesis drove perilipin 3 to the tubular ER. Forskolin, which like AlF(4)(-) activates adenylate cyclase, did not redistribute perilipin 3, but when added together with AlF(4)(-) perilipin 3 was recruited to lipid droplets rather than the ER. Thus inhibiting trafficking with AlF(4)(-) redistributed perilipin 3 differently under conditions of triacylglycerol synthesis (fatty acid addition) versus hydrolysis (forskolin) suggesting a shared acylglycerol-mediated mechanism. We tested whether diacylglycerol (DG), the immediate precursor of triacylglycerol and its first hydrolytic product, affects the distribution of perilipin 3. Stabilizing DG with the DG lipase inhibitor RHC80267 enhanced the perilipin 3 recruited to lipid droplets and raised DG levels in this fraction. Treating cells with a membrane-permeable DG recruited perilipin 3 to the ER. Stabilizing DG, by blocking its hydrolysis with RHC80267 or its acylation with triacsin C, enhanced recruitment of perilipin 3 to the ER. Expressing the ER enzyme DGAT1, which removes DG by converting it to triacylglycerol, attenuated perilipin 3 DG-induced ER recruitment. Membrane-permeable DG also drove perilipin 4 and 5 onto the ER. Together the data suggest that these lipid droplet proteins are recruited to DG-enriched membranes thereby linking lipid coat proteins to the metabolic state of the cell.