AbstractYeast is the most primitive organism synthesizing substantial amounts of sterols. Because of this eucaryotic organism's versatility in growth conditions, ease of culture, well‐defined genetic mechanism, and characteristic subcellar architecture, it is readily applied to studies of the role of sterols in the general economy of the cell. Sterols exist in two major form, as the free sterol, or esterified with long chain fatty acids. The importance of sterols for this organism can be demonstrated using a naturally occurring antimycotic azasterol. This agent inhibits yeast growth. Three effects are seen on sterol synthesis: inhibition of the enzymes Δ14‐reductase, sterol methyltransferase, and methylene reductase. Cells cultured on respiratory substrates are more sensitive to inhibition than are cells growing on glucose. We have demonstrated a relationship between respiratory competency and sterol biosynthesis in this organism. Many mutants altered in sterol synthesis are respirationally defective and must growth fermentatively. One clone has temperature conditional respiration. Experiments with purified mitochondria, perpared from this mutant and its isogenic wildtype, show that the mutant organism is able to respire at the higher temperature but lacks the ability to couple respiration to phosphorylation. No similar loss is seen in the wild‐type clones. Data are given which support the proposal that, for inclusion in mitochondrial structures, yeast cells may discriminate among sterols available from the total sterol pool in favor of ergosterol.