Lipids are naturally derived products that offer an attractive, renewable alternative to petroleum-based hydrocarbons. While naturally produced long-chain fatty acids can replace some petroleum analogs, medium-chain fatty acid would more closely match the desired physical and chemical properties of currently employed petroleum products. In this study we engineered Yarrowia lipolytica, an oleaginous yeast that naturally produces lipids at high titers, to produce medium-chain fatty acids. Five different acyl-ACP thioesterases with specificity for medium chain acyl-ACP molecules were expressed in Y. lipolytica, resulting in formation of either decanoic or octanoic acid. These novel fatty acid products were found to comprise up to 40% of the total cell lipids. Furthermore, the reduction in chain length resulted in a two-fold increase in specific lipid productivity in these engineered strains. The medium-chain fatty acids were found to be incorporated into all lipid classes.