We had previously isolated the temperature-sensitive erg26-1 mutant and characterized the sterol defects in erg26-1 cells (Baudry, K., Swain, E., Rahier, A., Germann, M., Batta, A., Rondet, S., Mandala, S., Henry, K., Tint, G. S., Edlind, T., Kurtz, M., and Nickels, J. T., Jr. (2001) J. Biol. Chem. 276, 12702-12711). We have now determined the defects in sphingolipid metabolism in erg26-1 cells, examined their effects on cell growth, and initiated studies designed to elucidate how might changes in sterol levels coordinately regulate sphingolipid metabolism in Saccharomyces cerevisiae. Using [(3)H]inositol radiolabeling studies, we found that the biosynthetic rate and steady-state levels of specific hydroxylated forms of inositolphosphorylceramides were decreased in erg26-1 cells when compared with wild type cells. [(3)H]Dihydrosphingosine radiolabeling studies demonstrated that erg26-1 cells had decreased levels of the phytosphingosine-derived ceramides that are the direct precursors of the specific hydroxylated inositol phosphorylceramides found to be lower in these cells. Gene dosage experiments using the sphingolipid long chain sphingoid base (LCB) hydroxylase gene, SUR2, suggest that erg26-1 cells may accumulate LCB, thus placing one point of sterol regulation of sphingolipid synthesis possibly at the level of ceramide metabolism. The results from additional genetic studies using the sphingolipid hydroxylase and copper transporter genes, SCS7 and CCC2, respectively, suggest a second possible point of sterol regulation at the level of complex sphingolipid hydroxylation. In addition, [(3)H]inositol radiolabeling of sterol biosynthesis inhibitor-treated wild type cells and late sterol pathway mutants showed that additional blocks in sterol biosynthesis have profound effects on sphingolipid metabolism, particularly sphingolipid hydroxylation state. Finally, our genetic studies in erg26-1 cells using the LCB phosphate phosphatase gene, LBP1, suggest that increasing the levels of the LCB sphingoid base phosphate can remediate the temperature-sensitive phenotype of erg26-1 cells.