In yeast, as in other eukaryotes, phosphatidylcholine (PC) can be synthesized via methylation of phosphatidylethanolamine or from free choline via the CDP-choline pathway. In yeast, PC biosynthesis is required for the repression of the phospholipid biosynthetic genes, including the INO1 gene, in response to inositol. In this study, we analyzed the effect of mutations in genes encoding enzymes involved in PC biosynthesis on the transcriptional regulation of phospholipid biosynthetic genes. We report that repression of INO1 transcription in response to inositol is clearly dependent on ongoing PC biosynthesis, but it is independent of the route of synthesis. Our results also suggest that intermediates in the phosphatidylethanolamine methylation and CDP-choline pathways are not responsible for generating the regulatory signal that results in repression of INO1 and other coregulated genes of phospholipid biosynthesis. Furthermore, repression of INO1 is not tightly correlated to the proportion of PC in the total cellular phospholipids. Rather, we report that when the rate of synthesis of PC becomes growth limiting, the addition of inositol fails to repress the phospholipid biosynthetic genes, but when the rate of PC synthesis is sufficient to sustain normal growth, the addition of inositol to the growth medium has the effect of repressing INO1 and other phospholipid biosynthetic genes.