Our knowledge of sphingolipid metabolism and function in Saccharomyces cerevisiae is growing rapidly. Here we discuss the current status of sphingolipid metabolism including recent evidence suggesting that exogenous sphingoid long-chain bases must first be phosphorylated and then dephosphorylated before incorporation into ceramide. Phenotypes of strains defective in sphingolipid metabolism are discussed because they provide hints about the undiscovered functions of sphingolipids and are one of the major reasons for studying this model eukaryote. The long-chain base phosphates, dihydrosphingosine-1-phosphate and phytosphingosine-1-phosphate, have been hypothesized to play roles in heat stress resistance, perhaps acting as signaling molecules. We evaluate the data supporting this hypothesis and suggest future experiments needed to verify it. Finally, we discuss recent clues that may help to reveal how sphingolipid synthesis and total cellular sphingolipid content are regulated.