Insig functions as a central regulator of cellular cholesterol homeostasis by controlling activity of HMG-CoA reductase (HMGR) in cholesterol synthesis. Insig both accelerates the degradation of HMGR and suppresses HMGR transcription through the SREBP-Scap pathway. The fission yeast Schizosaccharomyces pombe encodes homologs of Insig, HMGR, SREBP, and Scap, called ins1(+), hmg1(+), sre1(+), and scp1(+). Here, we characterize fission yeast Insig and demonstrate that Ins1 is dedicated to regulation of Hmg1, but not the Sre1-Scp1 pathway. Using a sterol-sensing domain mutant of Hmg1, we demonstrate that Ins1 binding to Hmg1 inhibits enzyme activity by promoting phosphorylation of the Hmg1 active site, which increases the K(M) for NADPH. Ins1-dependent phosphorylation of Hmg1 requires the MAP kinase Sty1/Spc1, and Hmg1 phosphorylation is physiologically regulated by nutrient stress. Thus, in fission yeast, Insig regulates sterol synthesis by a different mechanism than in mammalian cells, controlling HMGR phosphorylation in response to nutrient supply.