Ceramides and sphingoid long-chain bases (LCBs) are precursors to more complex sphingolipids and play distinct signaling roles crucial for cell growth and survival. Conserved reactions within the sphingolipid biosynthetic pathway are responsible for the formation of these intermediates. Components of target of rapamycin complex 2 (TORC2) have been implicated in the biosynthesis of sphingolipids in S. cerevisiae; however, the precise step regulated by this complex remains unknown. Here we demonstrate that yeast cells deficient in TORC2 activity are impaired for de novo ceramide biosynthesis both in vivo and in vitro. We find that TORC2 regulates this step in part by activating the AGC kinase Ypk2 and that this step is antagonized by the Ca2+/calmodulin-dependent phosphatase calcineurin. Because Ypk2 is activated independently by LCBs, the direct precursors to ceramides, our data suggest a model wherein TORC2 signaling is coupled with LCB levels to control Ypk2 activity and, ultimately, regulate ceramide formation.