Phospholipase C (Plc1p) is required for the initial step of inositol polyphosphate (InsP) synthesis, and yeast cells with deletion of the PLC1 gene are completely devoid of any InsPs and display aberrations in transcriptional regulation. Here we show that Plc1p is required for a normal level of histone acetylation; plc1Δ cells that do not synthesize any InsPs display decreased acetylation of bulk histones and global hypoacetylation of chromatin histones. In accordance with the role of Plc1p in supporting histone acetylation, plc1Δ mutation is synthetically lethal with mutations in several subunits of SAGA and NuA4 histone acetyltransferase (HAT) complexes. Conversely, the growth rate, sensitivity to multiple stresses, and the transcriptional defects of plc1Δ cells are partially suppressed by deletion of histone deacetylase HDA1. The histone hypoacetylation in plc1Δ cells is due to the defect in degradation of repressor Mth1p, and consequently lower expression of HXT genes and reduced conversion of glucose to acetyl-CoA, a substrate for HATs. The histone acetylation and transcriptional defects can be partially suppressed and the overall fitness improved in plc1Δ cells by increasing the cellular concentration of acetyl-CoA. Together, our data indicate that Plc1p and InsPs are required for normal acetyl-CoA homeostasis, which, in turn, regulates global histone acetylation.