Apicomplexan parasites cause important human diseases including malaria and AIDS associated opportunistic infections. Effectiveness of current drug treatments are challenged by side effects and wide spread resistance. The discovery of the apicoplast, an organelle derived from a prokaryote, and the metabolic pathways within, presents novel drug targets unique to the parasite. Apicoplast localized Type II fatty acid synthesis (FASII) is one such pathway. The remarkable divergence of apicoplast FASII from human FASI makes it a potential drug target. But the biological functions of this pathway are currently unknown. Moreover, some apicomplexans including Toxoplasma gondii, encodes an additional FAS I pathway. In the presence of potentially redundant mechanisms, the functional significance of apicoplast FASII remains elusive. The research presented here focuses on the elucidation of apicoplast FASII functions in the apicomplexan, T. gondii. Using a novel two marker approach, we engineered a TgFASII mutant, by the conditional knock-out of acyl carrier protein (ACP), a central FASII component. FASII knock down significantly reduced the growth and viability of parasites in cultured cells. FASII mutants formed smaller plaques, and were unable to establish disease in a mouse model, indicating an essential requirement of FASII for the growth and pathogenesis of T. gondii. Biochemical functions, extensively characterized by protein analysis, immunofluorescence assays, metabolic labeling and fluorescent transgene expression, indicate a role of FASII in the production of lipoic acid, an essential cofactor for the parasites sole pyruvate dehydrogenase complex (PDH). We also show a role of FASII in maintenance of the apicoplast. FASII knock down produces drastic effects on apicoplast morphology, resulting in organelle loss. Consistent with previous reports suggesting robust scavenge of fatty acids from the host cell by T.gondii, loss of FASII did not affect bulk fatty acid biosynthesis. In conclusion, we have generated a genetic model for the rigorous analysis of TgFASII functions. We show an essential requirement of apicoplast FASII for the maintenance of the apicoplast and enzymes within, including PDH. Most importantly, the critical nature of apicoplast FASII for the growth and pathogenesis of parasites validate this pathway as a viable drug target.