The oxysterol binding protein homologue Kes1p has been implicated in nonvesicular sterol transport in Saccharomyces cerevisiae. Kes1p also represses formation of protein transport vesicles from the trans-Golgi network (TGN) through an unknown mechanism. Here, we show that potential phospholipid translocases in the Drs2/Dnf family (type IV P-type ATPases [P4-ATPases]) are downstream targets of Kes1p repression. Disruption of KES1 suppresses the cold-sensitive (cs) growth defect of drs2Delta, which correlates with an enhanced ability of Dnf P4-ATPases to functionally substitute for Drs2p. Loss of Kes1p also suppresses a drs2-ts allele in a strain deficient for Dnf P4-ATPases, suggesting that Kes1p antagonizes Drs2p activity in vivo. Indeed, Drs2-dependent phosphatidylserine translocase (flippase) activity is hyperactive in TGN membranes from kes1Delta cells and is potently attenuated by addition of recombinant Kes1p. Surprisingly, Drs2p also antagonizes Kes1p activity in vivo. Drs2p deficiency causes a markedly increased rate of cholesterol transport from the plasma membrane to the endoplasmic reticulum (ER) and redistribution of endogenous ergosterol to intracellular membranes, phenotypes that are Kes1p dependent. These data suggest a homeostatic feedback mechanism in which appropriately regulated flippase activity in the Golgi complex helps establish a plasma membrane phospholipid organization that resists sterol extraction by a sterol binding protein.