Baker's yeast, Saccharomyces cerevisiae, is an excellent and an increasingly important model for the study of fundamental questions in eukaryotic cell biology and genetic regulation. The fission yeast, Schizosaccharomyces pombe, although not as intensively studied as S. cerevisiae, also has many advantages as a model system. In this review, we discuss progress over the past several decades in biochemical and molecular genetic studies of the regulation of phospholipid metabolism in these two organisms and higher eukaryotes. In S. cerevisiae, following the recent completion of the yeast genome project, a very high percentage of the gene-enzyme relationships in phospholipid metabolism have been assigned and the remaining assignments are expected to be completed rapidly. Complex transcriptional regulation, sensitive to the availability of phospholipid precusors, as well as growth phase, coordinates the expression of the structural genes encoding these enzymes in S. cerevisiae. In this article, this regulation is described, the mechanism by which the cell senses the ongoing metabolic activity in the pathways for phospholipid biosynthesis is discussed, and a model is presented. Recent information relating to the role of phosphatidylcholine turnover in S. cerevisiae and its relationship to the secretory pathway, as well as to the regulation of phospholipid metabolism, is also presented. Similarities in the role of phospholipase D-mediated phosphatidylcholine turnover in the secretory process in yeast and mammals lend further credence to yeast as a model system.