We have previously shown that mutants in the cardiolipin (CL) pathway exhibit temperature-sensitive growth defects that are not associated with mitochondrial dysfunction. The pgs1Delta mutant, lacking the first enzyme of the CL pathway, phosphatidylglycerolphosphate synthase (Pgs1p), has a defective cell wall due to decreased beta-1,3-glucan (Zhong, Q., Gvozdenovic-Jeremic, J., Webster, P., Zhou, J., and Greenberg, M. L. (2005) Mol. Biol. Cell 16, 665-675). Disruption of KRE5, a gene involved in cell wall biogenesis, restores beta-1,3-glucan synthesis and suppresses pgs1Delta temperature sensitivity. To gain insight into the mechanisms underlying the cell wall defect in pgs1Delta, we show in the current report that pgs1Delta cells have reduced glucan synthase activity and diminished levels of Fks1p, the glucan synthase catalytic subunit. In addition, activation of Slt2p, the downstream effector of the protein kinase C (PKC)-activated cell integrity pathway, was defective in pgs1Delta. The kre5W1166X suppressor restored Slt2p activation and dramatically increased (>10-fold) mRNA levels of FKS2, the alternate catalytic subunit of glucan synthase, partially restoring glucan synthase activity. Consistent with these results, up-regulation of PKC-Slt2 signaling and overexpression of FKS1 or FKS2 alleviated sensitivity of pgs1Delta to cell wall-perturbing agents and restored growth at elevated temperature. These findings demonstrate that functional Pgs1p is essential for cell wall biogenesis and activation of the PKC-Slt2 signaling pathway.