Gut granules are specialized lysosome-related organelles that act as sites of fat storage in Caenorhabditis elegans intestinal cells. We identified mutations in a gene, glo-3, that functions in the formation of embryonic gut granules. Some glo-3(-) alleles displayed a complete loss of embryonic gut granules, while other glo-3(-) alleles had reduced numbers of gut granules. A subset of glo-3 alleles led to mislocalization of gut granule contents into the intestinal lumen, consistent with a defect in intracellular trafficking. glo-3(-) embryos lacking gut granules developed into adults containing gut granules, indicating that glo-3(+) function may be differentially required during development. We find that glo-3(+) acts in parallel with or downstream of the AP-3 complex and the PGP-2 ABC transporter in gut granule biogenesis. glo-3 encodes a predicted membrane-associated protein that lacks obvious sequence homologs outside of nematodes. glo-3 expression initiates in embryonic intestinal precursors and persists almost exclusively in intestinal cells through adulthood. GLO-3::GFP localizes to the gut granule membrane, suggesting it could play a direct role in the trafficking events at the gut granule. smg-1(-) suppression of glo-3(-) nonsense alleles indicates that the C-terminal half of GLO-3, predicted to be present in the cytoplasm, is not necessary for gut granule formation. Our studies identify GLO-3 as a novel player in the formation of lysosome-related organelles.