Synthesis of ergosterol is demonstrated in the GL7 mutant of Saccharomyces cerevisiae. This sterol auxotroph has been thought to lack the ability to synthesize sterols due both to the absence of 2,3-oxidosqualene cyclase and to a heme deficiency eliminating cytochrome P-450 which is required in demethylation at C-14. However, when the medium sterol was 5 alpha-cholestan-3 beta-ol, 5 alpha-cholest-8(14)-en-3 beta-ol, or 24 beta-methyl-5 alpha-cholest-8(14)-en-3 beta-ol, sterol synthesis was found to proceed yielding 1-3 fg/cell of ergosterol (24 beta-methylcholesta-5,7,22E-trien-3 beta-ol). Ergosterol was identified by mass spectroscopy, gas and high performance liquid chromatography, ultraviolet spectroscopy, and radioactive labeling from [3H]acetate. Except for some cholest-5-en-3 beta-ol (cholesterol) which was derived from the 5 alpha-cholestan-3 beta-ol, the stanol and the two 8(14)-stenols were not significantly metabolized confirming the absence of an isomerase for migration of the double bond from C-8(14) to C-7. Drastic reduction of ergosterol synthesis to not more than 0.06 fg/cell was observed when the medium sterol either had a double bond at C-5, as in the case of cholesterol, or could be metabolized to a sterol with such a bond. Thus, both 5 alpha-cholest-8(9)-en-3 beta-ol and 5 alpha-cholest-7-en-3 beta-ol (lathosterol) were converted to cholesta-5,7-dien-3 beta-ol (7-dehydrocholesterol), and the presence of the latter dienol depressed the level of ergosterol. The most attractive of the possible explanations for our observations is the assumption of two genetic compartments for synthesis of sterols, one of which has and one of which has not been affected by the two mutations. The ability, despite the mutations, to synthesize small amounts of ergosterol which could act to regulate the cell cycle may also explain why this mutant can grow aerobically with cholesterol (acting in the bulk membrane role) as the sole exogenous sterol.