We isolated a mutant of Saccharomyces cerevisiae defective in the formation of phosphatidylcholine via methylation of phosphatidylethanolamine. The mutant synthesized phosphatidylcholine at a reduced rate and accumulated increased amounts of methylated phospholipid intermediates. It was also found to be auxotrophic for inositol and allelic to an existing series of ino4 mutants. The ino2 and ino4 mutants, originally isolated on the basis of an inositol requirement, are unable to derepress the cytoplasmic enzyme inositol-1-phosphate synthase (myo-inositol-1-phosphate synthase; EC 5.5.1.4). The INO4 and INO2 genes were, thus, previously identified as regulatory genes whose wild-type product is required for expression of the INO1 gene product inositol-1-phosphate synthase (T. Donahue and S. Henry, J. Biol. Chem. 256:7077-7085, 1981). In addition to the identification of a new ino4-allele, further characterization of the existing series of ino4 and ino2 mutants, reported here, demonstrated that they all have a reduced capacity to convert phosphatidylethanolamine to phosphatidylcholine. The pleiotropic phenotype of the ino2 and ino4 mutants described in this paper suggests that the INO2 and INO4 loci are involved in the regulation of phospholipid methylation in the membrane as well as inositol biosynthesis in the cytoplasm.