Research on signalling through phosphoinositides has made tremendous advances over the last few years. Studies with budding yeast (Saccharomyces cerevisiae) combine the advantage of a eukaryotic system with those of a rapidly growing, genetically modifiable and tractable organism of which the genome is fully sequenced. Hence, despite some differences in phosphoinositide signalling between mammals and yeast (e.g. the absence of PtdIns(3,4,5)P(3)), this model organism is at the forefront of phosphoinositide research. In this review we will focus on recent discoveries concerning the role of phosphoinositides in yeast.