Triacylglycerol (TAG) and glycogen are the two major metabolites for carbon storage in most eukaryotic organisms. We investigated the glycogen metabolism of the oleaginous Y. lipolytica and found that this yeast accumulates up to 16% glycogen in its biomass. Assuming that elimination of glycogen synthesis would result in an improvement of lipid accumulation, we characterized and deleted the single gene coding for glycogen synthase, YlGSY1. The mutant was grown under lipogenic conditions with glucose and glycerol as substrates and we obtained up to 60% improvement in TAG accumulation compared to the wild type strain. Additionally, YlGSY1 was deleted in a background that was already engineered for high lipid accumulation. In this obese background, TAG accumulation was also further increased. The highest lipid content of 52% was found after 3 days of cultivation in nitrogen-limited glycerol medium. Furthermore, we constructed mutants of Y. lipolytica and S. cerevisiae that are deleted for both glycogen and TAG synthesis, demonstrating that the ability to store carbon is not essential. Overall, this work showed that glycogen synthesis is a competing pathway for TAG accumulation in oleaginous yeasts and that deletion of the glycogen synthase has beneficial effects on neutral lipid storage.