Abstract: Monitoring Editor: Susan Wente In Saccharomyces cerevisiae, many osmotically inducible genes are regulated by the Sko1p-Ssn6p-Tup1p complex. On osmotic shock, the MAP kinase Hog1p associates with this complex, phosphorylates Sko1p, and converts it into an activator that subsequently recruits Swi/Snf and SAGA complexes. We have found that phospholipase C (Plc1p encoded by PLC1) is required for derepression of Sko1p-Ssn6p-Tup1p-controlled osmoinducible genes upon osmotic shock. Although plc1Delta mutation affects the assembly of the preinitiation complex after osmotic shock, it does not affect the recruitment of Hog1p and Swi/Snf complex at these promoters. However, Plc1p facilitates osmotic shock induced recruitment of the SAGA complex. Like plc1Delta cells, SAGA mutants are osmosensitive and display compromised expression of osmotically inducible genes. The reduced binding of SAGA to Sko1p-Ssn6p-Tup1p-repressed promoters in plc1Delta cells does not correlate with reduced histone acetylation. However, SAGA functions at these promoters to facilitate recruitment of the TATA-binding protein. The results thus provide evidence that Plc1p and inositol polyphosphates affect derepression of Sko1p-Ssn6p-Tup1p-controlled genes by a mechanism that involves recruitment of the SAGA complex and TATA-binding protein.