Cells maintain membrane fluidity by regulating lipid saturation, but the molecular mechanisms of this homeoviscous adaptation remain poorly understood. We have reconstituted the core machinery for regulating lipid saturation in baker's yeast to study its molecular mechanism. By combining molecular dynamics simulations with experiments, we uncover a remarkable sensitivity of the transcriptional regulator Mga2 to the abundance, position, and configuration of double bonds in lipid acyl chains, and provide insights into the molecular rules of membrane adaptation. Our data challenge the prevailing hypothesis that membrane fluidity serves as the measured variable for regulating lipid saturation. Rather, we show that Mga2 senses the molecular lipid-packing density in a defined region of the membrane. Our findings suggest that membrane property sensors have evolved remarkable sensitivities to highly specific aspects of membrane structure and dynamics, thus paving the way toward the development of genetically encoded reporters for such properties in the future.