Spatial organization of phospholipid synthesis in eukaryotes is critical for cellular homeostasis. The synthesis of phosphatidylcholine (PC), the most abundant cellular phospholipid, occurs redundantly via the ER-localized Kennedy pathway and a pathway that traverses the ER and mitochondria via membrane contact sites. The basis of the ER-mitochondrial PC synthesis pathway is the exclusive mitochondrial localization of a key pathway enzyme, phosphatidylserine decarboxylase Psd1, which generates phosphatidylethanolamine (PE). We find that Psd1 is localized to both mitochondria and the ER. Our data indicate that Psd1-dependent PE made at mitochondria and the ER has separable cellular functions. In addition, the relative organellar localization of Psd1 is dynamically modulated based on metabolic needs. These data reveal a critical role for ER-localized Psd1 in cellular phospholipid homeostasis, question the significance of an ER-mitochondrial PC synthesis pathway to cellular phospholipid homeostasis, and establish the importance of fine spatial regulation of lipid biosynthesis for cellular functions.