The hormone receptor-like protein Gpr1p physically interacts with phosphatidylinositol-specific phospholipase C (Plc1p) and with the Galpha protein Gpa2p, as shown by two-hybrid assays and co-immune precipitation of epitope-tagged proteins. Plc1p binds to Gpr1p in either the presence or absence of Gpa2, whereas the Gpr1p/Gpa2p association depends on the presence of Plc1p. Genetic interactions between the null mutations plc1Delta, gpr1Delta, gpa2Delta, and ras2Delta suggest that Plc1p acts together with Gpr1p and Gpa2p in a growth control pathway operating in parallel to the Ras2p function. Diploid cells lacking Gpr1p, Plc1p, or Gpa2p fail to form pseudohyphae upon nitrogen depletion, and the filamentation defect of gpr1Delta and plc1Delta strains is rescued by activating a mitogen-activated protein kinase pathway via STE11-4 or by activating a cAMP pathway via overexpressed Tpk2p. Plc1p is also required for efficient expression of the FG(TyA)::lacZ reporter gene under nitrogen depletion. In conclusion, we have identified two physically interacting proteins, Gpr1p and Plc1p, as novel components of a nitrogen signaling pathway controlling the developmental switch from yeast-like to pseudohyphal growth. Our data suggest that phospholipase C modulates the interaction of the putative nutrient sensor Gpr1p with the Galpha protein Gpa2p as a downstream effector of filamentation control.