The Saccharomyces cerevisiae PAH1 ‐encoded phosphatidate (PA) phosphatase catalyzes the penultimate step in the synthesis of triacylglycerol (TAG). It also provides the diacylglycerol used for the synthesis of phospholipids via the Kennedy pathway. PA phosphatase was a substrate for protein kinase A (PKA). Phosphorylation inhibited PA phosphatase activity with a 43% decrease in the specificity constant ( k cat / K m ) for the enzyme. Site direct mutagenesis followed by phosphopeptide mapping analyses indicated Ser 10 , Ser 677 , Ser 773 , Ser 774 , and Ser 788 were the target sites for PKA phosphorylation. Of the five sites, the phosphorylation Ser 10 had the greatest effect on PA phosphatase regulation. The phosphorylation‐deficient mutant S10A, which exhibited a 50% decrease in phosphorylation, abolished the phosphorylation‐mediated inhibition of PA phosphatase activity. Yeast cells expressing the phosphorylation‐mimic S10D mutation exhibited a 37% decrease in TAG, whereas cells expressing the phosphorylation‐deficient S10A mutation exhibited a 38% increase in TAG. The alterations in TAG synthesis were accompanied by corresponding changes in the synthesis of phospholipids. Supported by NIH grant GM 50679.