The fission yeast Schizosaccharomyces pombe is an excellent model system in which to study the coordination of cell growth and cell differentiation. In the presence of nutrients, fission yeast cells grow and divide; in the absence of nutrients, they stop growing and undergo cell differentiation. The molecular mechanisms underlying this response are not fully understood. Here, we demonstrate that Tor2, a fission yeast member of the TOR protein kinase family, is central to controlling the switch between cell growth and cell differentiation in response to nutrient availability. Tor2 controls cell growth and ribosome biogenesis by regulating ribosomal protein gene expression. We have found that Tor2 has an additional function in repressing sexual differentiation. Tor2 overexpression strongly represses mating, meiosis and sporulation efficiency, whereas Tor2 inactivation has the opposite effect, leading to cell differentiation, regardless of the nutritional conditions. This newly revealed function of Tor2 appears to operate by interfering with the functions of the transcription factor Ste11 and the meiosis-promoting RNA-binding protein Mei2. Thus, our data reveal a unique regulatory function of the Tor pathway - ensuring that growth and cell differentiation become mutually exclusive and that the choice between them depends on environmental conditions.