The size of all cells, from bacteria to vertebrates, is proportional to the growth rate set by nutrient availability, but the underlying mechanisms are unknown. Here, we show that nutrients modulate cell size and growth rate via the TORC2 signaling network in budding yeast. An important function of the TORC2 network is to modulate synthesis of ceramide lipids, which play roles in signaling. TORC2-dependent control of ceramide signaling strongly influences both cell size and growth rate. Thus, cells that cannot make ceramides fail to modulate their growth rate or size in response to changes in nutrients. PP2A associated with the Rts1 regulatory subunit (PP2A Rts1 ) is embedded in a feedback loop that controls TORC2 signaling and helps set the level of TORC2 signaling to match nutrient availability. Together, the data suggest a model in which growth rate and cell size are mechanistically linked by ceramide-dependent signals arising from the TORC2 network.