Eukaryotic cells store neutral lipids such as triacylglycerol (TAG) in lipid droplets (LDs). Here, we have addressed how LDs are functionally linked to the endoplasmic reticulum (ER). We show that, in S. cerevisiae, LD growth is sustained by LD-localized enzymes. When LDs grow in early stationary phase, the diacylglycerol acyl-transferase Dga1p moves from the ER to LDs and is responsible for all TAG synthesis from diacylglycerol (DAG). During LD breakdown in early exponential phase, an ER membrane protein (Ice2p) facilitates TAG utilization for membrane-lipid synthesis. Ice2p has a cytosolic domain with affinity for LDs and is required for the efficient utilization of LD-derived DAG in the ER. Ice2p breaks a futile cycle on LDs between TAG degradation and synthesis, promoting the rapid relocalization of Dga1p to the ER. Our results show that Ice2p functionally links LDs with the ER and explain how cells switch neutral lipid metabolism from storage to consumption.