Like many microalgae, Chlamydomonas reinhardtii forms lipid droplets rich in triacylglycerols when nutrient deprived. To begin studying the mechanisms underlying this process, nitrogen (N) deprivation was used to induce triacylglycerol accumulation and changes in developmental programs such as gametogenesis. Comparative global analysis of transcripts under induced and noninduced conditions was applied as a first approach to studying molecular changes that promote or accompany triacylglycerol accumulation in cells encountering a new nutrient environment. Towards this goal, high-throughput sequencing technology was employed to generate large numbers of expressed sequence tags of eight biologically independent libraries, four for each condition, N replete and N deprived, allowing a statistically sound comparison of expression levels under the two tested conditions. As expected, N deprivation activated a subset of control genes involved in gametogenesis while down-regulating protein biosynthesis. Genes for components of photosynthesis were also down-regulated, with the exception of the PSBS gene. N deprivation led to a marked redirection of metabolism: the primary carbon source, acetate, was no longer converted to cell building blocks by the glyoxylate cycle and gluconeogenesis but funneled directly into fatty acid biosynthesis. Additional fatty acids may be produced by membrane remodeling, a process that is suggested by the changes observed in transcript abundance of putative lipase genes. Inferences on metabolism based on transcriptional analysis are indirect, but biochemical experiments supported some of these deductions. The data provided here represent a rich source for the exploration of the mechanism of oil accumulation in microalgae.