To precisely define the functional sequence of the CHO1 gene from Saccharomyces cerevisiae, encoding the regulated membrane-associated enzyme phosphatidylserine synthase (PSS), we subcloned the original 4.5-kilobase (kb) CHO1 clone. In this report a 2.8-kb subclone was shown to complement the ethanolamine-choline auxotrophy and to repair the defect in the synthesis of phosphatidylserine, both of which are characteristic of cho1 mutants. When this subclone was used as a hybridization probe of Northern and slot blots of RNA from wild-type cells, the abundance of a 1.2-kb RNA changed in response to alterations in the levels of the soluble phospholipid precursors inositol and choline. The addition of inositol led to a 40% repression of the 1.2-kb RNA level, while the addition of choline and inositol led to an 85% repression. Choline alone had little repressive effect. The level of 1.2-kb RNA closely paralleled the level of PSS activity found in the same cells as determined by enzyme assays. Disruption of the CHO1 gene resulted in the simultaneous disappearance of 1.2-kb RNA and PSS activity. Cells bearing the ino2 or ino4 regulatory mutations, which exhibit constitutively repressed levels of a number of phospholipid biosynthetic enzymes, had constitutively repressed levels of 1.2-kb RNA and PSS activity. Another regulatory mutation, opi1, which causes the constitutive derepression of PSS and other phospholipid biosynthetic enzymes, caused the constitutive derepression of the 1.2-kb RNA. When cho1 mutant cells were transformed with the 2.8-kb subclone on a single-copy plasmid, the 1.2-kb RNA and PSS activity levels were regulated in a wild-type fashion. The presence of the 2.8-kb subclone on a multicopy plasmid, however, led to the constitutive overproduction of 1.2-kb RNA and PSS in cho1 cells.