Triacylglycerol (TAG) hydrolysis, membrane lipid biosynthesis, and lipid turnover are largely interlinked processes. In yeast, TAG is mobilized by three TAG lipases named Tgl3p, Tgl4p, and Tgl5p, which are localized to lipid particles/droplets. These TAG lipases posses a conserved GXSXG motif that is characteristic of hydrolytic enzymes. Here, we demonstrated that the yeast TAG lipase Tgl4p, the functional ortholog of the adipose TAG lipase, ATGL, catalyzes multiple functions in lipid metabolism. An extended domain and motif search analysis revealed that Tgl4p bears not only a lipase consensus domain but also a conserved motif for calcium-independent phospholipase A(2). We show that Tgl4p exhibits TAG lipase, steryl ester hydrolase, and phospholipase A(2) activities, but surprisingly it also catalyzed the acyl-CoA-dependent acylation of lysophosphatidic acid to phosphatidic acid (PA). Heterologous overexpression of Tgl4p in Pichia pastoris increased total phospholipid and specifically PA synthesis. Moreover, deletion of TGL4 in Saccharomyces cerevisiae showed an altered pattern of phosphatidylcholine and PA molecular species. Altogether, our data suggest that yeast Tgl4p functions as a hydrolytic enzyme in lipid degradation but also contributes to fatty acid channeling and phospholipid remodeling.