Carotenoids in W. dermatitids were found to be associated with membranes of lipid globules and/or proteins dispersed in the lipids in the yeast-phase of the organism. The lipid globules increase in size and the pigment concentrations increase with age of the cell. Electron micrographs show these organelles to be surrounded by a single unit membrane. The free carotenoids are extractable with ethyl ether from pigmented fractions of osmotically ruptured protoplasts only after the sample has been treated with acetone, indicating the pigment is non-covalently bound, presumably to a protein.