Cytoplasmic lipid droplets and microlipid droplets, intracellular precursors of milk lipid globules, had little ability to incorporate radioactivity from glycerol 3-phosphate or palmitoyl-CoA into triacylglycerols. The limited incorporation of these precursors by micro- and cytoplasmic lipid droplets from rat and cow mammary gland was into phospholipids primarily. Acyltransferases catalyzing incorporation of glycerol 3-phosphate into acylglycerols were concentrated in a relatively high buoyant density class of rough microsomes. Palmitoyl-CoA-sn-1,2-diacylglycerol acyltransferase activity was distributed heterogeneously among fractions obtained by equilibrium density gradient fractionation of mammary homogenates. Observations suggest that terminal steps of acylglycerol synthesis are localized primarily in rough endoplasmic reticulum of milk secreting mammary epithelial cells. There appears to be a heterogeneous distribution of acyltransferases along the reticular network.