Saccharomyces cerevisiae sterol and heme auxotrophs were used to elucidate a role for hemes in sterol esterification. Steryl ester synthase (SES) activity was stimulated on average fourfold in cells supplemented with 50 micrograms/ml delta-aminolevulinic acid (ALA). This stimulation was not dependent on ALA per se, but on the ability of this precursor to effect heme competency. The addition of ALA stimulated SES activity of yeast on either fermentative or respiratory carbon sources. The elevation of SES activity was independent of intracellular free sterol, unsaturated fatty acid, or methionine levels. SES activity increases as the cells enter stationary phase, and this increase is enhanced by heme competency. SES was directly inhibited by the hypocholesterolemic drug lovastatin (mevinolin). The inhibition of SES activity by lovastatin was enhanced in heme-competent cells.