A temperature-sensitive Saccharomyces cerevisiae mutant harboring a lesion in the ERG26 gene has been isolated. ERG26 encodes 4alpha-carboxysterol-C3 dehydrogenase, one of three enzymatic activities required for the conversion of 4,4-dimethylzymosterol to zymosterol. Gas chromatography/mass spectrometry analyses of sterols in this mutant, designated erg26-1, revealed the aberrant accumulation of a 4-methyl-4-carboxy zymosterol intermediate, as well as a novel 4-carboxysterol. Neutral lipid radiolabeling studies showed that erg26-1 cells also harbored defects in the rate of biosynthesis and steady-state levels of mono-, di-, and triglycerides. Phospholipid radiolabeling studies showed defects in the rate of biosynthesis of both phosphatidic acid and phosphatidylinositol. Biochemical studies revealed that microsomes isolated from erg26-1 cells contained greatly reduced 4alpha-carboxysterol-C3 dehydrogenase activity when compared with microsomes from wild type cells. Previous studies have shown that loss of function mutations in either of the fatty acid elongase genes SUR4/ELO3 or FEN1/GNS1/ELO2 can "bypass" the essentiality of certain ERG genes (Ladeveze, V., Marcireau, C., Delourme, D., and Karst, F. (1993) Lipids 28, 907-912; Silve, S., Leplatois, P., Josse, A., Dupuy, P. H., Lanau, C., Kaghad, M., Dhers, C., Picard, C., Rahier, A., Taton, M., Le Fur, G., Caput, D., Ferrara, P., and Loison, G. (1996) Mol. Cell. Biol. 16, 2719-2727). Studies presented here have shown that this sphingolipid-dependent "bypass" mechanism did not suppress the essential requirement for zymosterol biosynthesis. However, studies aimed at understanding the underlying physiology behind the temperature-sensitive growth defect of erg26-1 cells showed that the addition of several antifungal compounds to the growth media of erg26-1 cells could suppress the temperature-sensitive growth defect. Fluorescence microscopic analysis showed that GFP-Erg26p and GFP-Erg27p fusion proteins were localized to the endoplasmic reticulum. Two-hybrid analysis indicated that Erg25p, Erg26p, and Erg27p, which are required for the biosynthesis of zymosterol, form a complex within the cell.