Nutrient deprivation causes significant stress to the unicellular microalga, Chlamydomonas reinhardtii, which responds by significantly altering its metabolic program. In following N deprivation, the accumulation of starch and triacylglycerols (TAGs) is significantly altered following massive reprogramming of cellular metabolism. One protein that was found to change dramatically and early to this stress was TAB2, a photosystem I (PSI) translation initiation factor, whose transcript and protein levels increased significantly after only 30 min of N deprivation. A detailed physiological and omics-based analysis of an insertional mutant of Chlamydomonas with reduced TAB2 function was conducted to determine what role the functional PSI plays in regulating the cellular response to N deprivation. The tab2 mutant displayed increased acetate assimilation and elevated starch levels during the first 6 h of N deprivation, followed by a shift toward altered amino acid synthesis, reduced TAG content and altered fatty acid profiles. Our results suggested a central role for PSI in controlling cellular metabolism and its implication in regulation of lipid/starch partitioning. Time course analyses of the tab2 mutant versus wild type under N-deprived versus N replete conditions revealed changes in the ATP/NADPH ratio and suggested that TAG biosynthesis may be associated with maintaining the redox state of the cell during N deprivation. The loss of ability to accumulate TAG in the tab2 mutant co-occurred with an up-regulation of photo-protective mechanisms, suggesting that the synthesis of TAG in the wild type occurs not only as a temporal energy sink, but also as a protective electron sink. By exploiting the tab2 mutation in the cells of C. reinhardtii cultured under autotrophic, mixotrophic, and heterotrophic conditions during nitrogen replete growth and for the first 8 days of nitrogen deprivation, we showed that TAG accumulation and lipid/starch partitioning are dynamically regulated by alterations in PSI function, which concomitantly alters the immediate ATP/NADPH demand. This occurs even without removal of nitrogen from the medium, but sufficient external carbon must nevertheless be available. Our efforts to increase lipid accumulation in algae such as Chlamydomonas need to consider carefully how the energy balance of the cell is involved in or affected by such efforts and that numerous layers of metabolic and genetic regulatory control are likely to interfere with such efforts to control oil biosynthesis. Such knowledge will enable synthetic biology approaches to alter the response to the N depletion stress, leading to rewiring of the regulatory networks so that lipid accumulation could be turned on in the absence of N deprivation, allowing for the development of algal production strains with highly enhanced lipid accumulation profiles.