We report the development of an efficient genetic transformation system for Lipomyces starkeyi based on a modified lithium acetate transformation protocol. L. starkeyi is a highly lipogenic yeast that grows on a wide range of substrates. The initial transformation rate for this species was extremely low, and required very high concentrations of DNA. A systematic approach for optimizing the protocol resulted in an increase in the transformation efficiency by four orders of magnitude. Important parameters included cell density, the duration of incubation and recovery periods, the heat shock temperature, and the concentration of lithium acetate and carrier DNA within the transformation mixture. We have achieved efficiencies in excess of 8,000 transformants/µg DNA, which now make it possible to screen libraries in the metabolic engineering of this yeast. Metabolic engineering based on this transformation system could improve lipogenesis and enable formation of higher value products.