The Saccharomyces cerevisiae open reading frame YNL231C was recently found to be controlled by the multiple drug resistance regulator Pdr1p. Here we characterize YNL231C (PDR16) and its homologue YNL264C (PDR17). Deletion of PDR16 resulted in hypersensitivity of yeast to azole inhibitors of ergosterol biosynthesis. While no increase in drug sensitivity was found upon deletion of PDR17 alone, a Deltapdr16,Deltapdr17 double mutant was hypersensitive to a broad range of drugs. Both mutations caused significant changes of the lipid composition of plasma membrane and total cell extracts. Deletion of PDR16 had pronounced effects on the sterol composition, whereas PDR17 deletion mainly affected the phospholipid composition. Thus, Pdr16p and Pdr17p may regulate yeast lipid synthesis like their distant homologue, Sec14p. The azole sensitivity of the PDR16-deleted strain may be the result of imbalanced ergosterol synthesis. Impaired plasma membrane barrier function resulting from a change in the lipid composition appears to cause the increased drug sensitivity of the double mutant strain Deltapdr16,Deltapdr17. The uptake rate of rhodamine-6-G into de-energized cells was shown to be almost 2-fold increased in a Deltapdr16,Deltapdr17 strain as compared with wild-type and Deltapdr5 strains. Collectively, our results indicate that PDR16 and PDR17 control levels of various lipids in various compartments of the cell and thereby provide a mechanism for multidrug resistance unrecognized so far.