In Saccharomyces cerevisiae, the essential ceramide synthase reaction requires the presence of one of a homologous pair of genes, LAG1 and LAC1. Mutants that lack both of these genes cannot produce ceramide and exhibit a striking synthetic growth defect. While the regulation of ceramide production is critical for the control of proliferation and for stress tolerance, little is known of the mechanisms that ensure proper control of this process. The data presented here demonstrate that the pleiotropic drug resistance (Pdr) regulatory pathway regulates the transcription of multiple genes encoding steps in sphingolipid biosynthesis, including LAC1. The zinc cluster transcriptional activators Pdr1p and Pdr3p bind to Pdr1p/Pdr3p-responsive elements (PDREs) in the promoters of Pdr pathway target genes. LAC1 contains a single PDRE in its promoter, but notably, LAG1 does not. Reporter gene, Northern blot, and Western blot assays indicated that the expression level of Lac1p is approximately three times that of Lag1p. Detailed analyses of the LAC1 promoter demonstrated that transcription of this gene is inhibited by the presence of the transcription factor Cbf1p and the anaerobic repressor Rox1p. LAG1 transcription was also elevated in cbf1Delta cells, indicating at least one common regulatory input. Although a hyperactive Pdr pathway altered the profile of sphingolipids produced, the loss of either LAC1 or LAG1 alone failed to produce further changes. Two other genes involved in sphingolipid biosynthesis (LCB2 and SUR2) were found to contain PDREs in their promoters and to be induced by the Pdr pathway. These data demonstrate extensive coordinate control of sphingolipid biosynthesis and multidrug resistance in yeast.