The DPP1 gene, encoding diacylglycerol pyrophosphate (DGPP) phosphatase from Saccharomyces cerevisiae, has recently been identified as a zinc-regulated gene, and it contains a putative zinc-responsive element (UAS ZRE ) in its promoter. In this work we examined the hypothesis that expression of DGPP phosphatase was regulated by zinc availability. The deprivation of zinc from the growth medium resulted in a time-and dosedependent induction of -galactosidase activity driven by a P DPP1 -lacZ reporter gene. This regulation was dependent on the UAS ZRE in the DPP1 promoter and was mediated by the Zap1p transcriptional activator. Induction of the DGPP phosphatase protein and activity by zinc deprivation was demonstrated by immunoblot analysis and measurement of the dephosphorylation of DGPP. The regulation pattern of DGPP phosphatase in mutants defective in plasma membrane (Zrt1p and Zrt2p) and vacuolar membrane (Zrt3p) zinc transporters indicated that enzyme expression was sensitive to the cytoplasmic levels of zinc. DGPP phosphatase activity was inhibited by zinc by a mechanism that involved formation of DGPP-zinc complexes. Studies with well characterized subcellular fractions and by indirect immunofluorescence microscopy revealed that the DGPP phosphatase enzyme was localized to the vacuolar membrane.The DPP1-encoded diacylglycerol pyrophosphate (DGPP) 1 phosphatase (1) is a membrane-associated enzyme from the yeast Saccharomyces cerevisiae that catalyzes the removal of the -phosphate from DGPP to form PA and then removes the phosphate from PA to form DG (2). DGPP is a minor phospholipid in S. cerevisiae (2) that contains a pyrophosphate group attached to DG (3). DGPP is derived from PA via the reaction catalyzed by PA kinase (2, 4). DGPP is postulated to function in a novel lipid-signaling pathway (5, 6). Metabolic labeling studies with plants, where DGPP was first discovered (3), show that DGPP accumulates upon G protein activation (7) and upon hyperosmotic stress (8, 9). Exogenous DGPP augments secretion of prostaglandins in mouse macrophages (10). This occurs by a mechanism that involves the activation of cytosolic phospholipase A 2 via the mitogen-activated protein kinase pathway, an important event in the immunoinflammatory response of leukocytes (10). The accumulation of DGPP in plants is short-lived (9); it is rapidly converted to PA and then to DG (11), consistent with the reactions catalyzed by yeast DGPP phosphatase (2).DPP1-encoded DGPP phosphatase also exhibits a PA phosphatase activity (2), but DGPP is the preferred substrate, with a specificity constant 10-fold higher than that of PA (2). The DGPP phosphatase protein (1) contains a three-domain phosphatase sequence motif (12-14) that is conserved in a superfamily of lipid phosphatase enzymes (15)(16)(17)(18)(19) We have begun to examine the regulation of DGPP phosphatase expression in S. cerevisiae to gain an understanding of DGPP function. The enzyme is induced by inositol in both exponential and stationary phase cells (23). DGPP phosphatase exp...