Saccharomyces cerevisiae cells lacking the amphiphysin-like orthologs, Rvs161 or Rvs167, are unable to thrive under many stress conditions. Here we show cells lacking Rvs161 require Cdc55, the B subunit of the yeast ceramide-activated protein phosphatase, for viability under heat stress. By using specific rvs mutant alleles, we linked this lethal genetic interaction to loss of Rvs161 endocytic domain function. Recessive mutations in the sphingolipid pathway, such as deletion of the very long-chain fatty acid elongase, Sur4, suppress the osmotic growth defect of rvs161 cells. We demonstrate that Cdc55 is required for sur4-dependent suppressor activity and that protein phosphatase activation, through overexpression of CDC55 alone, can also remediate this defect. Loss of SUR4 in rvs161 cells reinitiates Ste3 a-factor receptor endocytosis and requires Cdc55 function to do so. Moreover, overexpression of CDC55 reinitiates Ste3 endocytic-dependent degradation and restores fluid phase endocytosis in rvs161 cells. In contrast, loss of SUR4 or CDC55 overexpression does not remediate the actin polarization defects of osmotic stressed rvs161 cells. Importantly, remediation of rvs161 defects by protein phosphatase activation requires the ceramide-activated protein phosphatase catalytic subunit, Sit4, and the protein phosphatase 2A catalytic subunits, Pph21/Pph22. Finally, genetic analyses reveal a synthetic lethal interaction between loss of CDC55 and gene deletions lethal with rvs161, all of which function in endocytosis.