Saccharomyces cerevisiae LIP1 encodes a regulatory subunit that forms a complex with the ceramide synthase catalytic subunits, Lag1/Lac1, which is localized on the membrane of endoplasmic reticulum. To understand the underlying regulatory mechanism of sphingolipid biosynthesis, we generated strains upon replacing the chromosomal LIP1 promoter with a Tet‐off promoter, which enables the expression in Dox‐dependent manner. The lip1‐1 strain, obtained through the promoter substitution, exhibits severe growth inhibition and remarkable decrease in sphingolipid synthesis in the presence of Dox. Using this strain, we investigated the effect of a decrease in ceramide synthesis on TOR complex 2 (TORC2)‐Ypk1 signaling, which senses the complex sphingolipid level at the plasma membrane and promotes sphingolipid biosynthesis. In lip1‐1 cells, Ypk1 was activated via both upstream kinases, TORC2 and yeast PDK1 homologues, Pkh1/2, thereby inducing hyperphosphorylation of Lag1, but not of another Ypk1‐substrate, Orm1, which is a known negative regulator of the first step of sphingolipid metabolism, in the presence of Dox. Therefore, our data suggest that the metabolic enzyme activities at each step of the sphingolipid biosynthetic pathway are controlled through a fine regulatory mechanism.