Emerging evidence implicates the vital role of mitochondria in lipid consumption and storage, highlighting the intimate link between energy production and saving. Although formation of giant lipid droplets, which is the key hallmark of the oleaginous yeast Lipomyces starkeyi, appears to be regulated in response to changes in mitochondrial shape and metabolism, technical limitations of genetic manipulation have become an obstacle to uncover the mitochondrial behavior in this nonconventional yeast. Here, we established an L. starkeyi strain stably expressing a fluorescent marker for monitoring mitochondrial morphology and degradation and found that mitochondria are mostly fragmented in L. starkeyi cells under fermentable, nonfermentable, and nitrogen depletion conditions. Notably, a fraction of mitochondria-specific fluorescent signals was localized to the vacuole, a lytic organelle in yeast, indicating degradation of mitochondria in those cells. This possible catabolic event was more predominant in cells under nutrient-poor conditions than that in cells under nutrient-rich conditions, concomitantly with lipid droplet formation. Collectively, our studies provide a new tool to investigate mitochondrial dynamics in L. starkeyi and decipher the potential role of mitochondrial degradation in lipid metabolism.