The subcellular location and cell biological function of small GTPase Rab40c in mammalian cells have not been investigated in detail. In this study, we demonstrated that the exogenously expressed GFP-Rab40c associates with lipid droplets marked by neutral lipid specific dye Oil red or Nile red, but not with the Golgi or endosomal markers. Further examination demonstrated that Rab40c is also associated with ERGIC-53 containing structures, especially under the serum starvation condition. Rab40c is increasingly recruited to the surface of lipid droplets during lipid droplets formation and maturation in HepG2 cells. Rab40c knockdown moderately decreases the size of lipid droplets, suggesting that Rab40c is involved in the biogenesis of lipid droplets. Stimulation for adipocyte differentiation increases the expression of Rab40c in 3T3-L1 cells. Rab40c interacts with TIP47, and is appositionally associated with TIP47-labeled lipid droplets. In addition, over-expression of Rab40c causes the clustering of lipid droplets independent of its GTPase activity, but completely dependent of the intact SOCS box domain of Rab40c. In addition, Rab40c displayed self-interaction as well as interaction with TIP47 and the SOCS box is essential for its ability to induce clustering of lipid droplets. Our results suggest that Rab40c is a novel Rab protein associated with lipid droplets, and is likely involved in modulating the biogenesis of lipid droplets.