Inclusions of neutral lipids termed lipid droplets (LDs) located throughout the cell were identified in the cyanobacterium Nostoc punctiforme by staining with lipophylic fluorescent dyes. LDs increased in number upon entry into stationary phase and addition of exogenous fructose indicating a role for carbon storage, whereas high-light stress did not increase LD numbers. LD accumulation increased when nitrate was used as the nitrogen source during exponential growth as compared to added ammonia or nitrogen-fixing conditions. Analysis of isolated LDs revealed enrichment of triacylglycerol (TAG), α-tocopherol, and C17 alkanes. LD TAG from exponential phase growth contained mainly saturated C16 and C18 fatty acids, whereas stationary phase LD TAG had additional unsaturated fatty acids characteristic of whole cells. This is the first characterization of cyanobacterial LD composition and conditions leading to their production. Based upon their abnormally large size and atypical location, these structures represent a novel sub-organelle in cyanobacteria.