The isolation of the dep1 mutant of Saccharomyces cerevisiae is reported. The mutant was identified by its disability to regulate expression of structural genes involved in phospholipid biosynthesis, INO1, CHO1 and OPI3, in response to supplementation with soluble lipid precursors. Expression of the INO1, CHO1 and OPI3 genes was not fully derepressed in the absence of soluble lipid precursors, inositol and choline in the dep1 mutant, as compared to wild type. The mutant also exhibited incomplete repression of these same genes in the presence of inositol and choline. Repression by phosphate of the PHO5 gene was reduced in the mutant, as was derepression of this gene in the absence of phosphate. In addition, we show that expression of INO1 and OPI3 structural genes is strongly dependent on the growth phase both in wild-type and dep1 mutant strains. However, in the mutant, elevated basal steady-state mRNA levels were reached in the late stationary growth phase, independent of supplementation conditions. The dep1 mutation represents a new complementation group with respect to phospholipid synthesis and was mapped to a position of about 12 cM distal from the centromere on the left arm of chromosome I. Deficiencies in transcription activation and repression of metabolically unrelated genes, as well as reduced mating efficiency and lack of sporulation of homozygous diploid dep1/dep1 mutants indicate a pleiotropic regulatory function of the DEP1 gene product. Thus, Dep1p appears to be a new member of a class of transcriptional modulators, including Rpd1p/Sin3p/Ume4p/Sdi1p/Gam3p, Rpd3p, Spt10p and Spt21p.