Saccharomyces cerevisiae is frequently used as a bioreactor for conversion of exogenously acquired metabolites into value-added products, but has not been utilized for bioconversion of low-cost lipids such as triacylglycerols (TAGs) because the cells are typically unable to acquire these lipid substrates from the growth media. To help circumvent this limitation, the Yarrowia lipolytica lipase 2 (LIP2) gene was cloned into S. cerevisiae expression vectors and used to generate S. cerevisiae strains that secrete active Lip2 lipase (Lip2p) enzyme into the growth media. Specifically, LIP2 expression was driven by the S. cerevisiae PEX11 promoter, which maintains basal transgene expression levels in the presence of sugars in the culture medium but is rapidly upregulated by fatty acids. Northern blotting, lipase enzyme activity assays, and gas chromatographic measurements of cellular fatty acid composition after lipid feeding all confirmed that cells transformed with the PEX11 promoter-LIP2 construct were responsive to lipids in the media, i.e., cells expressing LIP2 responded rapidly to either free fatty acids or TAGs and accumulated high levels of the corresponding fatty acids in intracellular lipids. These data provided evidence of the creation of a self-regulating positive control feedback loop that allows the cells to upregulate Lip2p production only when lipids are present in the media. Regulated, autonomous production of extracellular lipase activity is a necessary step towards the generation of yeast strains that can serve as biocatalysts for conversion of low-value lipids to value-added TAGs and other novel lipid products.