The PLB1 gene of Saccharomyces cerevisiae encodes a protein that demonstrates phospholipase B, lysophospholipase, and transacylase activities. Several genes with significant homology to PLB1 exist in the S. cerevisiae genome, raising the possibility that other proteins may contribute to the total phospholipase B/lysophospholipase/transacylase activities of the cell. We report the isolation of a previously uncharacterized gene that is highly homologous to PLB1 and that, when overexpressed, confers resistance to 1-palmitoyllysophosphatidylcholine. This gene, which is located adjacent to the PLB1 gene on the left arm of chromosome XIII and which we refer to as PLB2, encodes a phospholipase B/lysophospholipase. Unlike PLB1, this gene product does not contain significant transacylase activity. The PLB2 gene product shows lysophospholipase activity toward lysophosphatidylcholine, lysophosphatidylserine, and lysophosphatidylethanolamine. Whereas deletion of either PLB1 or PLB2 resulted in the loss of 80% of cellular lysophospholipase activity, a plb1/plb2 double deletion mutant is completely devoid of lysophospholipase activity toward the preferred substrate lysophosphatidylcholine. Overexpression of PLB2 was associated with an increase in total cellular phospholipase B/lysophospholipase activity, as well as the appearance of significant lysophospholipase activity in the medium. Moreover, overexpression of PLB2 was associated with saturation at a higher cell density, and an increase in total cellular phospholipid content, but no change in phospholipid composition or fatty acid incorporation into cellular lipids. Deletion of PLB2 was not lethal and did not result in alteration of membrane phospholipid composition or content. PLB2 gene expression was found to be maximal during exponential growth conditions and was decreased in late phase, in a manner similar to other genes involved in phospholipid metabolism.