The nuclear envelope is a subdomain of the endoplasmic reticulum (ER). Here we characterize CNEP-1 (CTD [Cterminal domain] nuclear envelope phosphatase-1), a nuclear envelope-enriched activator of the ER-associated phosphatidic acid phosphatase lipin that promotes synthesis of major membrane phospholipids over phosphatidylinositol (PI). CNEP-1 inhibition led to ectopic ER sheets in the vicinity of the nucleus that encased the nuclear envelope and interfered with nuclear envelope breakdown (NEBD) during cell division. Reducing PI synthesis suppressed these phenotypes, indicating that CNEP-1 spatially regulates phospholipid flux, biasing it away from PI production in the vicinity of the nuclear envelope to prevent excess ER sheet formation and NEBD defects.Supplemental material is available for this article.Received September 11, 2013; revised version accepted December 13, 2013. The endoplasmic reticulum (ER) is composed of sheets and tubules bounded by a membrane bilayer that faces the cytoplasm on one side and an internal lumen on the other. The ER is partitioned into subdomains specialized for different functions. The nuclear envelope subdomain is a spherical sheet perforated by nuclear pores that encases the chromatin. The outer membrane and lumen of the nuclear envelope are directly contiguous with other ER structural elements, whereas passage of proteins to the inner nuclear membrane (INM) is gated by the nuclear pores (Hetzer 2010;English and Voeltz 2013). The chromatin-facing INM is associated with the nuclear lamina, a dense filament meshwork that provides structural support (Hetzer 2010;Gerace and Huber 2012).The ER also serves as a platform for de novo phospholipid synthesis (Fagone and Jackowski 2009;Lagace and Ridgway 2013). A central player is the conserved phosphatase lipin, which converts phosphatidic acid (PA) to diacylglycerol (DAG) Siniossoglou 2013). In metazoans, lipin is at a branching point in the phospholipid synthesis pathway; the major building blocks of membrane bilayers (phosphatidylcholine [PC] and phosphatidylethanolamine [PE]) are synthesized from the lipin product DAG, whereas phosphatidylinositol (PI) is synthesized from the lipin substrate PA Lagace and Ridgway 2013;Siniossoglou 2013). PI is converted to phosphoinositides (PIPs) when transported to other organelles that house specific PIP kinases and phosphatases (Balla 2013). Within the ER, PC and PE make up >70% of total phospholipid, whereas PI makes up <10% (van Meer et al. 2008). In metazoans, decreased lipin activity is predicted to shift phospholipid flux away from production of DAG and the major membrane phospholipids PC and PE toward the production of PI. This is in contrast to budding yeast, where a pathway that is not present in metazoans (the CDP-DAG pathway) (Supplemental Fig. S1A) converts PA to major membrane phospholipids (Carman and Han 2011;Siniossoglou 2013). Thus, lipin inhibition in budding yeast leads to an increase in all phospholipids and an abnormal expansion of the nuclear envelope that does not occu...