The yeast open reading frame YOL002c encodes a putative membrane protein. This protein is evolutionarily conserved across species, including humans, although the function of each of these proteins remains unknown. YOL002c is highly expressed in yeast cells that are grown in the presence of saturated fatty acids such as myristate. Furthermore, cells in which the YOL002c gene is disrupted grow poorly on this carbon source. These mutant cells are also resistant to the polyene antibiotic, nystatin. Gene chip analysis on yol002cDelta cells revealed that a variety of genes encoding proteins involved in fatty acid metabolism and in the phosphate signaling pathway are induced in this mutant strain. In addition, our studies demonstrated that in the disruption strain acid phosphatase activity is expressed constitutively, and the cells accumulate polyphosphate to much higher levels than wild-type cells. A homologous human protein is able to partially rescue these defects in phosphate metabolism. We propose that YOL002c encodes a Saccharomyces cerevisiae protein that plays a key role in metabolic pathways that regulate lipid and phosphate metabolism.