The Caco-2 human intestinal cell line was used to examine fatty acid esterification during development of the enterocytic phenotype. Acyl-CoA synthetase activity increased approximately 40%, and the incorporation of palmitic acid into triacylglycerol relative to phosphatidylcholine increased nearly 2-fold during Caco-2 differentiation. A rate-limiting enzyme activity in the glycerol 3-phosphate pathway of triacylglycerol synthesis, glycerol-3-phosphate acyltransferase, was at levels comparable with rat jejunum and remained unchanged during differentiation. In contrast, the activity of monoacylglycerol acyltransferase, which is unique to the monoacylglycerol pathway of triacylglycerol synthesis, was present at < 7% of the levels in rat jejunum. Further analysis of the glycerol 3-phosphate pathway showed that the rate-limiting enzyme activities for diacylglycerol conversion to triacylglycerol, diacylglycerol acyltransferase, and phosphatidylcholine, CTP:phosphocholine cytidylyltransferase, increased 2-3-fold and decreased approximately 40%, respectively, during Caco-2 differentiation. In addition, a 2-fold increase in cellular diacylglycerol mass was observed during enterocytic conversion. These data indicate that fatty acid esterification to triacylglycerol in Caco-2 cells occurs primarily via the glycerol 3-phosphate pathway. Furthermore, the differentiation-dependent increase in fatty acid esterification to triacylglycerol relative to phosphatidylcholine appears to result from increased utilization of diacylglycerol to synthesize triacylglycerol and a concomitant decrease in diacylglycerol utilization for phosphatidylcholine synthesis.