Membrane contact sites (MCSs) are regions in cells where membranes of two organelles are in close apposition. MCSs are proposed to facilitate non‐vesicular trafficking of lipids. Lipid transfer proteins (LTPs) are one of the most commonly‐found components in the MCS system and are speculated to mediate lipid transfer between membranes. However, both the biological functions of MCSs and the functional role of LTP in MCSs remain largely elusive. Herein, we examine in detail a previously‐proposed MCSs model, the ER‐Golgi/endosome MCS facilitating the phosphatidylserine (PtdSer) decarboxylation 2 (Psd2) pathway, which converts PtdSer into phosphatidylethanolamine (PtdEtn) in Saccharomyces cerevisiae. Particularly, we investigate the biological role of a yeast LTP, one of the yeast Phosphatidylinositol (PtdIns)‐Transfer Proteins (PITPs), Sfh4, and a PtdIns 4‐OH kinase Stt4, in this Psd2‐MCS system.We found that Psd2, Sfh4, and Stt4 are the only essential components facilitating Psd2‐dependent PtdEtn synthesis while other previously proposed elements constituting the Psd2‐MCS (Scs2, Scs22, and Pbi1) are dispensable. Surprisingly, neither the PtdIns‐transfer activity of Sfh4 nor its capacity to activate Stt4 is required to stimulate the Psd2 pathway. Instead, Sfh4 activates the Psd2 pathway via an Sfh4‐Psd2 physical interaction involving the F175 residue on the surface of Sfh4. Stt4 also displays physical interaction with Psd2 in an Sfh4‐independent manner. Instead of directly activating Psd2, Stt4 regulates the substrate pool accessible to Psd2, thereby indirectly controlling the Psd2‐mediated synthesis of PtdEtn. These results demonstrate that the ER‐endosomal MCS model is an inaccurate description of the Psd2 system in yeast, and provide an outstanding example where PITP biological function is uncoupled from its ‘canonical’ activity as a PtdIns transfer protein. Additionally, our findings reveal a novel mechanism in which a PITP and a PtdIns 4‐OH kinase regulate cellular phospholipid homeostasis.Support or Funding InformationThis work was supported by grants from the National Institutes of Health (GM44530) and the Robert A. Welch Foundation (BE‐0117) to VAB. The authors declare no financial conflicts.This abstract is from the Experimental Biology 2019 Meeting. There is no full text article associated with this abstract published in The FASEB Journal.