The sphingolipid metabolites ceramide and sphingosine-1-phosphate are second messengers with opposing roles in mammalian cell growth arrest and survival; their relative cellular level has been proposed to be a rheostat that determines the fate of cells. This report demonstrates that this rheostat is an evolutionarily conserved stress-regulatory mechanism that influences growth and survival of yeast. Although the role of sphingosine-1-phosphate in yeast was not previously examined, accumulation of ceramide has been shown to induce G
1
arrest and cell death. We now have identified a gene in
Saccharomyces cerevisiae, LBP1,
that regulates the levels of phosphorylated sphingoid bases and ceramide.
LBP1
was cloned from a yeast mutant that accumulated phosphorylated long-chain sphingoid bases and diverted sphingoid base intermediates from sphingolipid pathways to glycerophospholipid biosynthesis.
LBP1
and its homolog,
LBP2
, encode very hydrophobic proteins that contain a novel-conserved sequence motif for lipid phosphatases, and both have long-chain sphingoid base phosphate phosphatase activity.
In vitro
characterization of Lbp1p shows that this phosphatase is Mg
2+
-independent with high specificity for phosphorylated long-chain bases, phytosphingosine and sphingosine. The deletion of
LBP1
results in the accumulation of phosphorylated long-chain sphingoid bases and reduced ceramide levels. Moreover, deletion of
LBP1
and
LBP2
results in dramatically enhanced survival upon severe heat shock. Thus, these phosphatases play a previously unappreciated role in regulating ceramide and phosphorylated sphingoid base levels in yeast, and they modulate stress responses through sphingolipid metabolites in a manner that is reminiscent of their effects on mammalian cells.