In fission yeast, orthologs of mammalian SREBP and Scap, called Sre1 and Scp1, monitor oxygen-dependent sterol synthesis as a measure of cellular oxygen supply. Under low oxygen conditions, sterol synthesis is inhibited, and Sre1 cleavage is activated. However, the sterol signal for Sre1 activation is unknown. In this study, we characterized the sterol signal for Sre1 activation using a combination of Sre1 cleavage assays and gas chromatography sterol analysis. We find that Sre1 activation is regulated by levels of the 4-methyl sterols 24-methylene lanosterol and 4,4-dimethylfecosterol under conditions of low oxygen and cell stress. Both increases and decreases in the level of these ergosterol pathway intermediates induce Sre1 proteolysis in a Scp1-dependent manner. The SREBP ortholog in the pathogenic fungus Cryptococcus neoformans is also activated by high levels of 4-methyl sterols, suggesting that this signal for SREBP activation is conserved among unicellular eukaryotes. Finally, we provide evidence that the sterol-sensing domain of Scp1 is important for regulating Sre1 proteolysis. The conserved mutations Y247C, L264F, and D392N in Scp1 that render Scap insensitive to sterols cause constitutive Sre1 activation. These findings indicate that unlike Scap, fission yeast Scp1 responds to 4-methyl sterols and thus shares properties with mammalian HMG-CoA reductase, a sterol-sensing domain protein whose degradation is regulated by the 4-methyl sterol lanosterol.Lipid homeostasis in mammals is regulated at the transcriptional level by sterol regulatory element-binding proteins (SREBPs), 4 a family of ER membrane-bound transcription factors (1, 2). SREBPs control expression of over 30 genes required for low density lipoprotein uptake and synthesis of fatty acids, triglycerides, phospholipids, and cholesterol (3). SREBP contains two transmembrane segments and is inserted into the ER membrane in a hairpin fashion such that the N and C termini are in the cytosol. The N terminus of SREBP is a basic helixloop-helix leucine zipper (bHLH-zip) transcription factor. The C terminus of SREBP binds SREBP cleavage activating protein (Scap), an ER membrane protein required for the function of SREBP.SREBP transcriptional activity is controlled by cellular cholesterol concentration through a negative feedback system. In cells with high levels of cholesterol, the SREBP-Scap complex is retained in the ER in an inactive state. ER retention is mediated by an interaction of Scap with the ER resident protein Insig (4). A drop in cholesterol levels disrupts the binding of Scap and Insig, facilitating ER exit of SREBP-Scap and transport to the Golgi apparatus. In the Golgi, SREBP is activated by two proteolytic cleavage events mediated by the Site-1 and Site-2 proteases (5). Upon cleavage, the N-terminal bHLH-zip domain of SREBP is released from the membrane and enters the nucleus to activate transcription of target genes required for lipid homeostasis.The sterol-sensing ability of the SREBP pathway is mediated by Scap, a polytopic ER mem...