Although phospholipase B (PLB) enzymes have been described in eukaryotes from yeasts to mammals, their biological functions are poorly understood. Here we describe the characterization of plb1, one of five genes predicted to encode PLB homologs in the fission yeast, Schizosaccharomyces pombe. The plb1 gene is dispensable under normal growth conditions but required for viability in high-osmolarity media and for normal osmotic stress-induced gene expression. Unlike mutants defective in function for the stress-activated MAP kinase Spc1, plb1Delta cells are not hypersensitive to oxidative or temperature stresses, nor do they undergo a G2-specific arrest in response to osmotic stress. In addition to defects in osmotic stress response, plb1Delta cells exhibit a cold-sensitive defect in nutrient-mediated mating repression, a phenotype reminiscent of mutants in the cyclic AMP (cAMP) pathway. We show that, like plb1Delta cells, mutants in the cAMP pathway are defective for growth in high-osmolarity media, demonstrating a previously unrecognized role for the cAMP pathway in osmotic stress response. Furthermore, we show that gain-of function in the cAMP pathway can rescue the osmosensitive growth defect of plb1Delta cells, suggesting that the cAMP pathway is a potential downstream target of the actions of Plb1 in S. pombe.