Membranes isolated from Saccharomyces cerevisiae, strain ATCC 26615, catalyze the decarboxylation of exogenous phosphatidylserine added as an aqueous dispersion in detergent. Active preparations of the decarboxylase can be obtained by extracting salt-washed membranes with 0.5% Cutscum . The properties of the phosphatidylserine decarboxylase activity associated with a particulate fraction and the detergent extracts have been characterized by assaying the enzymatic conversion of exogenous [14C]phosphatidylserine to [14C]phosphatidylethanolamine. The yeast decarboxylase does not require a divalent cation and is inhibited by hydroxylamine and p-hydroxymercuribenzoate. The rate of decarboxylation of exogenous phosphatidylserine catalyzed by membranes prepared from cells grown in the presence of choline is reduced by approximately 60% compared to membranes from cells grown in a choline-deficient medium. Relatively smaller reductions in phosphatidylserine decarboxylase activity are also seen in cells grown in the presence of mono- or dimethylethanolamine. In vitro incorporation studies with [14C]serine demonstrate that endogenous, prelabeled phosphatidylserine can be utilized for the biosynthesis of phosphatidylcholine by the coupled action of the hydroxylamine-sensitive decarboxylase and the phospholipid N-methyltransferases in the presence of 2 mM S-adenosylmethionine. A similar comparative enzymatic study shows that the rates of synthesis and decarboxylation of [14C]phosphatidylserine, as well as phospholipid N-methylation, are lower for membranes prepared from cells grown in the presence of choline relative to identical preparations from cells grown in the absence of choline. These studies describe the properties of particulate and detergent-solubilized phosphatidylserine decarboxylase activity in S. cerevisiae and provide evidence that its activity is regulated in coordination with other enzymes in the pathway for phosphatidylcholine biosynthesis involving N-methylation.