Saccharomyces cerevisiae cells lacking their mitochondrial DNA (rho0 cells) respond to this loss of genetic information by induction of a program of nuclear gene expression called the retrograde response. Expression of genes involved in multidrug resistance and sphingolipid biosynthesis is coordinately induced in rho0 cells by the zinc cluster transcription factor Pdr3p. In this report, we identify a membrane protein involved in control of intracellular levels of a sphingolipid precursor as a transcriptional target of the Pdr3p-mediated retrograde response. These sphingolipid precursors are called long chain bases (LCBs) and increased LCB levels are growth inhibitory. This membrane protein has been designated Rsb1p and has previously been shown to act as a LCB transporter protein and to be a component of the endoplasmic reticulum. These earlier studies used an amino-terminal truncated form of Rsb1p. Here we employ a full-length form of Rsb1p and find that this protein is localized to the plasma membrane and is modified by N-linked glycosylation. Two glycosylation sites are present in the Rsb1p and both are required for normal LCB resistance. Mutational analysis of the RSB1 promoter revealed that two Pdr3p binding sites are present and both of these are required for normal retrograde induction of transcription. LCB tolerance is strongly increased in rho0 cells but this increase is ablated in rho0 rsb1Delta cells. Together, these data indicate Pdr3p activation of RSB1 transcription is an important feature of the retrograde response allowing normal detoxification of an endogenous sphingolipid precursor.