In Saccharomyces cerevisiae, toxic concentrations of Na+ orLi+ ions induce the expression of the cation-extrusion ATPase gene, ENA1. Several well-studied signal transduction pathways are known correlating high salinity to the transcriptional activation of ENA1. Nevertheless, information on the actual sensing mechanism initiating these pathways is limited. Here, we report that the ISC1-encoded phosphosphingolipid-specific phospholipase C appears to be involved in stimulation of ENA1 expression and, consequently, in mediating Na+ and Li+ tolerance in yeast. Deletion of ISC1 distinctly decreased cellular Na+ and Li+ tolerance as growth of the Deltaisc1::HIS5 mutant, DZY1, was severely impaired by 0.5 m NaCl or 0.01 m LiCl. In contrast,K+ tolerance and general osmostress regulation wereunaffected. Isc1Delta mutant growth with 0.9 m KCl and glycerol accumulation in the presence of 0.9 m NaCl or 1.5 m sorbitol were comparable to that of the wild-type. ENA1-lacZ reporter studies suggested that the increased salt sensitivity of the isc1Delta mutant is related to a significant reduction of Na+/Li+-stimulated ENA1 expression. Correspondingly, Ena1p-dependent extrusion of Na+/Li+ ions was less efficient in the isc1Delta mutant than in wild-type cells. Itis suggested that ISC1-dependent hydrolysis of an unidentified yeast inositol phosphosphingolipid represents an early event in one of the salt-induced signalling pathways of ENA1 transcriptional activation.