Hyperosmotic stress triggers a complex adaptive response that is dominantly regulated by the Hog1 MAP kinase in yeast. Here we characterize a novel physiological determinant of osmostress tolerance, which involves the Hog1-dependent transcriptional downregulation of ergosterol biosynthesis genes (ERG). Yeast cells considerably lower their sterol content in response to high osmolarity. The transcriptional repressors Mot3 and Rox1 are essential for this response. Both factors together with Hog1 are required to rapidly and transiently shut down transcription of ERG2 and ERG11 upon osmoshock. Mot3 abundance and its binding to the ERG2 promoter is stimulated by osmostress in a Hog1-dependent manner. As an additional layer of control, the expression of the main transcriptional activator of ERG gene expression, Ecm22, is negatively regulated by Hog1 and Mot3/Rox1 upon salt shock. Oxidative stress also triggers repression of ERG2, 11 transcription and a profound decrease in total sterol levels. However, this response was only partially dependent on Mot3/Rox1 and Hog1. Finally, we show that the upc2-1 mutation confers stress insensitive hyperaccumulation of ergosterol, overexpression of ERG2, 11 and severe sensitivity to salt and oxidative stress. Our results indicate that transcriptional control of ergosterol biosynthesis is an important physiological target of stress signalling.