In Saccharomyces cerevisiae, the phosphate signal transduction pathway (PHO pathway) is known to regulate the expression of several phosphate-responsive genes, such as PHO5 and PHO84. However, the fundamental issue of whether cells sense intracellular or extracellular phosphate remains unresolved. To address this issue, we have directly measured intracellular phosphate concentrations by 31 P NMR spectroscopy. We find that PHO5 expression is strongly correlated with the levels of both intracellular orthophosphate and intracellular polyphosphate and that the signaling defect in the ⌬pho84 strain is likely to result from insufficient intracellular phosphate caused by a defect in phosphate uptake. Furthermore, the ⌬phm1⌬phm2, ⌬phm3, and ⌬phm4 strains, which lack intracellular polyphosphate, have higher intracellular orthophosphate levels and lower expression of PHO5 than the wild-type strain. By contrast, the ⌬phm5 strain, which has lower intracellular orthophosphate and higher polyphosphate levels than the wild-type strain, shows repressed expression of PHO5, similar to the wildtype strain. These observations suggest that PHO5 expression is under the regulation of intracellular orthophosphate, although orthophosphate is not the sole signaling molecule. Moreover, the disruption of PHM3, PHM4, or of both PHM1 and PHM2 in the ⌬pho84 strain suppresses, although not completely, the PHO5 constitutive phenotype by increasing intracellular orthophosphate, suggesting that Pho84p affects phosphate signaling largely by functioning as a transporter.Inorganic phosphate is an essential nutrient needed in large amounts for nucleic acid and phospholipid biosynthesis, as well as for energy metabolism. It is therefore essential that organisms have appropriate regulatory mechanisms to respond and adapt rapidly to changes in phosphate availability (1). In Saccharomyces cerevisiae, the phosphate signal transduction pathway (PHO pathway) regulates the expression of several phosphate-responsive genes that are involved in the scavenging and specific uptake of phosphate from extracellular sources, including PHO5, which encodes repressible acid phosphatase (rAPase), 1 and PHO84, which encodes a high affinity phosphate transporter that acts in response to phosphate levels (2-4). Under high phosphate conditions, the transcription factor Pho4p is phosphorylated by the cyclin-dependent kinase (CDK) complex Pho80p-Pho85p (5) and exported from the nucleus to the cytoplasm (6), thereby turning off expression of the PHO5 and PHO84 genes. When yeast cells are starved of phosphate, the CDK inhibitor Pho81p inactivates 8). Under these conditions, Pho4p is unphosphorylated and active (9), leading to the induction of PHO5 and PHO84 expression to scavenge phosphate from the environment (2-4, 10). Although many components and the molecular mechanism of the PHO pathway have been extensively studied, fundamental questions, such as whether cells sense intracellular or extracellular phosphate and what phosphate metabolites function as signals for regulating t...