In Saccharomyces cerevisiae, unlike in higher eukaryotic cells, most of the reactions involved in phospholipid biosynthesis occur both in mitochondria and in the endoplasmic reticulum. Some of the key enzymes involved, however, are restricted to one compartment. Thus, the formation of phosphatidylethanolamine by decarboxylation of phosphatidylserine occurs only in mitochondria, while phosphatidylcholine synthesis via methylation of phosphatidylethanolamine is restricted to microsomes. When yeast cells were pulse labelled with [3H]serine,[3H] phosphatidylethanolamine formed in mitochondria was found not only in the organelle but also, with even higher specific radioactivity, in the endoplasmic reticulum. Translocation of phosphatidylethanolamine between organelles was blocked immediately after poisoning cells with cyanide, azide and fluoride. Part of the [3H]phosphatidylcholine formed in the endoplasmic reticulum by methylation of [3H]phosphatidylethanolamine was transferred to mitochondria. This process continued in deenergized cells, although at a lower rate as compared to metabolizing cells. This result indicates rapid movement of both phosphatidylethanolamine and phosphatidylcholine requires metabolic energy, but that phosphatidylinositol-specific phospholipid transfer protein that has been found in saccharomyces cerevisiae (Daum, G. and Paltauf, F. (1984) Biochim. Biophys. Acta 784, 385-391). The mechanism of movement of phospholipids from internal membranes to the cell surface was studied with temperature-sensitive secretory mutants (Schekman, R. (1982) Trends Biochem. Sci. 7, 243-246) of Saccharomyces cerevisiae. A shift from the permissive to the restrictive temperature, which blocks the flow of vesicles involved in the secretion of proteins, had no effect on the transfer of phosphatidylinositol to the plasma membrane.