Yeast members of the ORMDL family of endoplasmic reticulum (ER) membrane proteins play a central role in lipid homeostasis and protein quality control. In the absence of yeast Orm1 and Orm2, accumulation of long chain base, a sphingolipid precursor, suggests dysregulation of sphingolipid synthesis. Physical interaction between Orm1 and Orm2 and serine palmitoyltransferase, responsible for the first committed step in sphingolipid synthesis, further supports a role for the Orm proteins in regulating sphingolipid synthesis. Phospholipid homeostasis is also affected in orm1Δ orm2Δ cells: the cells are inositol auxotrophs with impaired transcriptional regulation of genes encoding phospholipid biosynthesis enzymes. Strikingly, impaired growth of orm1Δ orm2Δ cells is associated with constitutive unfolded protein response, sensitivity to stress, and slow ER-to-Golgi transport. Inhibition of sphingolipid synthesis suppresses orm1Δ orm2Δ phenotypes, including ER stress, suggesting that disrupted sphingolipid homeostasis accounts for pleiotropic phenotypes. Thus, the yeast Orm proteins control membrane biogenesis by coordinating lipid homeostasis with protein quality control.