Abstract: An important problem in polarized morphogenesis is how polarized transport of membrane vesicles is spatiotemporally regulated. Here, we report that a local change in the transbilayer phospholipid distribution of the plasma membrane regulates the axis of polarized growth. Type 4 P-type ATPases Lem3p-Dnf1p and -Dnf2p are putative heteromeric phospholipid flippases in budding yeast that are localized to polarized sites on the plasma membrane. The lem3Delta mutant exhibits prolonged apical growth due to a defect in the switch to isotropic bud growth. In lem3Delta cells, the small GTPase Cdc42p remains polarized at the bud tip where phosphatidylethanolamine remains exposed on the outer leaflet. Intriguingly, phosphatidylethanolamine and phosphatidylserine stimulate GTPase-activating protein (GAP) activity of Rga1p and Rga2p toward Cdc42p, whereas PI(4,5)P(2) inhibits it. We propose that a redistribution of phospholipids to the inner leaflet of the plasma membrane triggers the dispersal of Cdc42p from the apical growth site, through activation of GAPs.