The Saccharomyces cerevisiae PHO5 gene product accounts for a majority of the acid phosphatase activity. Its expression is induced by the basic helix-loop-helix (bHLH) protein, Pho4p, in response to phosphate depletion. Pho4p binds predominantly to two UAS elements (UASp1 at -356 and UASp2 at -247) in the PHO5 promoter. Previous studies from our lab have shown cross-regulation of different biological processes by bHLH proteins. This study tested the ability of all yeast bHLH proteins to regulate PHO5 expression and identified inositol-mediated regulation via the Ino2p/Ino4p bHLH proteins. Ino2p/Ino4p are known regulators of phospholipid biosynthetic genes. Genetic epistasis experiments showed that regulation of PHO5 by inositol required a third UAS site (UASp3 at -194). ChIP assays showed that Ino2p:Ino4p bind the PHO5 promoter. These results demonstrate that phospholipid biosynthesis is coordinated with phosphate utilization via the bHLH proteins.