We define the dynamics of spatial and temporal reorganization of the team of proteins and lipids serving peroxisome division. The peroxisome becomes competent for division only after it acquires the complete set of matrix proteins involved in lipid metabolism. Overloading the peroxisome with matrix proteins promotes the relocation of acyl-CoA oxidase (Aox), an enzyme of fatty acid beta-oxidation, from the matrix to the membrane. The binding of Aox to Pex16p, a membrane-associated peroxin required for peroxisome biogenesis, initiates the biosynthesis of phosphatidic acid and diacylglycerol (DAG) in the membrane. The formation of these two lipids and the subsequent transbilayer movement of DAG initiate the assembly of a complex between the peroxins Pex10p and Pex19p, the dynamin-like GTPase Vps1p, and several actin cytoskeletal proteins on the peroxisomal surface. This protein team promotes membrane fission, thereby executing the terminal step of peroxisome division.