The carbon isotopic composition of any naturally synthesized organic compound depends on (1) the carbon source utilized, (2) isotope effects associated with assimilation of carbon by the producing organism, (3) isotope effects associated with metabolism and biosynthesis, and (4) cellular carbon budgets. These factors are reviewed and quantitative considerations summarized, particularly with regard to active and passive modes of carbon assimilation by phytoplankton and the existence of discernible regularities in isotope effects associated with lipid biosynthesis. It is concluded that n-alkyl lipids are in general depleted in C-13 by about 1.5 parts per thousand relative to polyisoprenoid lipids produced by the same organism. The effects of biological reworking on isotopic compositions of organic carbon are examined and it is suggested that enrichment of C-13 in sedimentary organic carbon may result from loss of CH4 from zooplanktonic gut communities. Isotopic methods for estimation of ancient CO2 levels are considered and a hyperbolic form favored for the relationship between concentrations of dissolved CO2 and isotopic fractionation.