In this study, we characterize a new function for activator of stress response genes (Asg1) in fatty acid utilization. Asg1 is required for full activation of genes in several pathways, including beta-oxidation (POX1, FOX2, and POT1), gluconeogenesis (PCK1), glyoxylate cycle (ICL1), triacylglycerol breakdown (TGL3), and peroxisomal transport (PXA1). In addition, the transcriptional activator Asg1 is found to be enriched on promoters of genes in beta-oxidation and gluconeogenesis pathways, suggesting that Asg1 is directly involved in the control of fatty acid utilizing genes. In agreement, impaired growth on non-fermentable carbons such as fatty acids and oils and increased sensitivity to some oxidative agents are found for the Delta asg1 strain. The lipid class profile of the Delta asg1 cells grown in oleate displays approximately 3-fold increase in free fatty acid (FFA) content in comparison to glucose-grown cells, which correlates with decreased expression of beta-oxidation genes. The a dagger asg1 strain grown in glucose also exhibits higher accumulation of triacylglycerols (TAGs) during log phase, reaching levels typically observed in stationary phase cells. Altered TAG accumulation is partly due to the inability of the Delta asg1 cells to efficiently break down TAGs, which is consistent with lowered expression of TGL3 gene, encoding triglycerol lipase. Overall, these results highlight a new role of the transcriptional regulator Asg1 in coordinating expression of genes involved in fatty acid utilization and its role in regulating cellular lipid accumulation, thereby providing an attractive approach to increase FFAs and TAGs content for the production of lipid-derived biofuels and chemicals in Saccharomyces cerevisiae.