Saccharomyces cerevisiae dihydroceramidase Ydc1p hydrolyzes ceramide, resulting in accumulation of free long-chain bases and their phosphates. Yeast mutants lacking YDC1 are characterized by increased chronological lifespan. Moreover, we found YDC1 up-regulated in a yeast mutant displaying reduced chronological lifespan. These data suggest an important role for Ydc1p in chronological lifespan determination in yeast. Mitochondria are known to play an important role in chronological lifespan and apoptosis. In this study we demonstrated that overexpression of YDC1 results in reduced chronological lifespan and increased apoptotic cell death. We found YDC1 overexpression to result in mitochondrial fragmentation and dysfunction. Interestingly, vacuoles also appeared to be fragmented and dysfunctional upon YDC1 overexpressing. Exogenous addition of ceramide to YDC1-overexpressing cultures increased chronological lifespan and restored organelle function. In conclusion, this study describes a direct link between ceramide metabolism in yeast and mitochondrial and vacuolar fragmentation and function, with consequences for chronological lifespan in yeast.