We determined the quantum requirements for growth (1/phi) and fatty acid (FA) biosynthesis (1/phi FA) in the marine diatom, Phaeodactylum tricornutum, grown in nutrient replete conditions with nitrate or ammonium as nitrogen sources, and under nitrogen limitation, achieved by transferring cells into nitrogen free medium or by inhibiting nitrate assimilation with tungstate. A treatment in which tungstate was supplemented to cells grown with ammonium was also included. In nutrient replete conditions, cells grew exponentially and possessed virtually identical 1/phi of 4044mol photonsmol C1. In parallel, 1/phi FA varied between 380 and 409mol photonsmol C1 in the presence of nitrate, but declined to 348mol photonsmol C1 with ammonium and to 250mol photonsmol C1 with ammonium plus tungstate, indicating an increase in the efficiency of FA biosynthesis relative to cells grown on nitrate of 8% and 35%, respectively. While the molecular mechanism for this effect remains poorly understood, the results unambiguously reveal that cells grown on ammonium are able to direct more reductant to lipids. This analysis suggests that when cells are grown with a reduced nitrogen source, fatty acid biosynthesis can effectively become a sink for excess absorbed light, compensating for the absence of energetically demanding nitrate assimilation reactions. Our data further suggest that optimal lipid production efficiency is achieved when cells are in exponential growth, when nitrate assimilation is inhibited, and ammonium is the sole nitrogen source.