BACKGROUND Diploid cells of Saccharomyces cerevisiae undergo either pseudohyphal differentiation or sporulation in response to depletion of carbon and nitrogen sources. Distinct signaling pathways regulate filamentation and sporulation in response to nutrient limitation. How these pathways are coordinated for implementing distinct cell fate decisions in response to similar nutritional cues is an enigma. Although the role of trehalose pathway in sporulation has been extensively studied, it's possible role in pseudohyphal differentiation has been unexplored. RESULTS Briefly, tps1 and tps2 mutants were tested for their ability to form pseudohyphae independently as well as in the background of GPR1 and RAS2 mutations. Here, we demonstrate that disruption of TPS1 but not TPS2 inhibits pseudohyphae formation. Interestingly, deletion of GPR1 suppresses the above defect. Further genetic analysis revealed that TPS1 and TPS2 exert opposing effects in triggering filamentation. CONCLUSIONS We provide new insights into the role of an otherwise well-known pathway of trehalose biosynthesis in pseudohyphal differentiation. Based on additional data we propose that downstream signaling, mediated by cAMP may be modulated by nutrient mediated differential regulation of RAS2 by TPS1 and TPS2.