Saccharomyces cerevisiae contains three dynamin-related-proteins, Vps1p, Dnm1p and Mgm1p. Previous data from glucose-grown VPS1 and DNM1 null mutants suggested that Vps1p, but not Dnm1p, plays a role in regulating peroxisome abundance. Here we show that deletion of DNM1 also results in reduction of peroxisome numbers. This was not observed in glucose-grown dnm1 cells, but was evident in cells grown in the presence of oleate. Similar observations were made in cells lacking Fis1p, a protein involved in Dnm1p function. Fluorescence microscopy of cells producing Dnm1-GFP or GFP-Fis1p demonstrated that both proteins had a dual localization on mitochondria and peroxisomes. Quantitative analysis revealed a greater reduction in peroxisome number in oleate-induced vps1 cells relative to dnm1 or fis1 cells. A significant fraction of oleate-induced vps1 cells still contained two or more peroxisomes. Conversely, almost all cells of a dnm1 vps1 double-deletion strain contained only one, enlarged peroxisome. This suggests that deletion of DNM1 reinforces the vps1 peroxisome phenotype. Time-lapse imaging indicated that during budding of dnm1 vps1 cells, the single peroxisome present in the mother cell formed long protrusions into the developing bud. This organelle divided at a very late stage of the budding process, possibly during cytokinesis.