The endoplasmic reticulum (ER) is a multifunctional organelle responsible for production of both lumenal and membrane components of secretory pathway compartments. Secretory proteins are folded, processed, and sorted in the ER lumen and lipid synthesis occurs on the ER membrane itself. In the yeast Saccharomyces cerevisiae, synthesis of ER components is highly regulated: the ER-resident proteins by the unfolded protein response and membrane lipid synthesis by the inositol response. We demonstrate that these two responses are intimately linked, forming different branches of the same pathway. Furthermore, we present evidence indicating that this coordinate regulation plays a role in ER biogenesis.