An open reading frame (CDS1) residing on chromosome II of Saccharomyces cerevisiae encodes a hydrophobic protein with a predicted molecular mass of 51,789 Da, which exhibits 29 and 37% amino acid sequence identities with CDP-diacylglycerol synthases reported from Escherichia coli and Drosophila, respectively. Induction of expression of a GAL1 promoter-driven CDS1 gene on a multicopy plasmid in a cds1 null mutant background resulted in synthase activity 10 times that of wild-type cells and an elevation in the apparent initial rate of synthesis of phosphatidylinositol relative to phosphatidylserine. Without induction, activity was reduced to 10% of wild-type levels, which was sufficient to support growth but resulted in an inositol excretion phenotype, and had an opposite effect on the above phospholipid synthesis. Null cds1 mutants were incapable of spore germination or vegetative growth and could not be complemented under uninduced conditions with a GAL1 promoter-driven CDS1 gene on a low copy plasmid. Therefore, the essential CDS1 gene encodes the majority, if not all, of the synthase activity. The lack of consensus RNA splice sites derived from the genomic CDS1 sequence predicts that the multiple subcellular locations for synthase activities do not arise through RNA processing events.