The Saccharomyces cerevisiae OLE1 gene encodes the Delta-9 fatty acid desaturase, a highly regulated integral membrane enzyme involved in the formation of unsaturated fatty acids from saturated acyl-coenzyme A precursors. The mRNA levels of the OLE1 gene are regulated by at least two independent control systems that respond to nutrient fatty acids. One involves the unsaturated fatty acid repression of OLE1 transcription; the second, described in this report, involves unsaturated fatty acid-responsive changes in the half-life of the OLE1 mRNA. Measurements of OLE1 mRNA half-life indicate that it is a moderately stable species (t1/2 = 10 +/- 1.5 min) in cells grown in medium without exogenous fatty acids. Its half-life is drastically reduced (t1/2 < 2.5 min), in a time-dependent manner, following the addition of unsaturated fatty acids to the growth medium. Saturated fatty acids that have previously been shown to increase activation of OLE1 transcription do not regulate its mRNA stability. Inhibition of translation, by the addition of cycloheximide, slows the nucleolytic degradation of the OLE1 mRNA and blocks the unsaturated fatty acid-triggered reduction in its half-life. This suggests an intimate link between the two processes of mRNA decay and protein synthesis. A chimeric mRNA, produced by replacing the upstream activation and fatty acid-regulated regions of the OLE1 promoter with the GAL1 promoter sequences is destabilized by exogenous unsaturated fatty acids. A similar chimera under GAL1 control that replaces the OLE1 mRNA 5'-untranslated region with GAL1 sequences is not regulated by unsaturated fatty acids. These results suggest that the 5'-untranslated region of the OLE1 mRNA contains sequence elements required for fatty acid-triggered destabilization. Disruption of the XRN1 gene, which encodes a 5' --> 3'-exoribonuclease, results in an approximate 4-fold increase in OLE1 mRNA half-life in the absence of fatty acids. Its half-life is reduced when those cells are exposed to unsaturated fatty acids, indicating that the 5'-exoribonuclease encoded by the XRN1 gene is required for the rapid degradation of the OLE1 transcript but is not required for fatty acid-induced destabilization.