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We report that the dye nile red, 9-diethylamino-5H-benzo[alpha]phenoxazine-5-one, is an excellent vital stain for the detection of intracellular lipid droplets by fluorescence microscopy and flow cytofluorometry. The specificity of the dye for lipid droplets was assessed on cultured aortic smooth muscle cells and on cultured peritoneal macrophages that were incubated with acetylated low density lipoprotein to induce cytoplasmic lipid overloading. Better selectivity for cytoplasmic lipid droplets was obtained when the cells were viewed for yellow-gold fluorescence (excitation, 450-500 nm; emission, greater than 528 nm) rather than red fluorescence (excitation, 515-560 nm; emission, greater than 590 nm). Nile red-stained, lipid droplet-filled macrophages exhibited greater fluorescence intensity than did nile red-stained control macrophages, and the two cell populations could be differentiated and analyzed by flow cytofluorometry. Such analyses could be performed with either yellow-gold or red fluorescence, but when few lipid droplets per cell were present, the yellow-gold fluorescence was more discriminating. Nile red exhibits properties of a near-ideal lysochrome. It is strongly fluorescent, but only in the presence of a hydrophobic environment. The dye is very soluble in the lipids it is intended to show, and it does not interact with any tissue constituent except by solution. Nile red can be applied to cells in an aqueous medium, and it does not dissolve the lipids it is supposed to reveal.