Diacylglycerol acyltransferases (DGATs) catalyze the final and only committed step of triacylglycerol synthesis. DGAT activity is rate limiting for triacylglycerol accumulation in mammals, plants and microbes. DGATs belong to three different evolutionary classes. In Arabidopsis thaliana, DGAT1, encoded by At2g19450, is the major DGAT enzyme involved in triacylglycerol accumulation in seeds. Until recently, the function of DGAT2 (At3g51520) has remained elusive. Previous attempts to characterize its enzymatic function by heterologous expression in yeast were unsuccessful. In the present report we demonstrate that expression of a codon-optimized version of the DGAT2 gene is able to restore neutral lipid accumulation in the Saccharomyces cerevisiae mutant strain (H1246), which is defective in triacylglycerol biosynthesis. Heterologous expression of codon-optimized DGAT2 and DGAT1 induced the biogenesis of subcellular lipid droplets containing triacylglycerols and squalene. Both DGAT proteins were found to be associated with these lipid droplets. The fatty acid composition was affected by the nature of the acyltransferase expressed. DGAT2 preferentially incorporated C16:1 fatty acids whereas DGAT1 displayed preference for C16:0, strongly suggesting that these enzymes have contrasting substrate specificities.