Model for Mdm1-mediated LD formation and clustering. (A) Cartoon depicting NVJ-associated LD delivery to the vacuole via µ-lipopohagy. LDs initially form on the ER and accumulate near the NVJ, eventually translocating to the vacuole surface for lipophagy. In mdm1Δ yeast, LDs accumulate on the nuclear envelope. When exposed to exogenous FAs, ΔLD-mdm1Δ yeast exhibit ER morphological defects and lipotoxicity. (B) Illustration depicting a model for Mdm1’s role in localized FA processing and LD formation at the NVJ through interaction with Faa1.