Endoplasmic reticulum-plasma membrane (ER-PM) contact sites are specialized stable regions of the ER that are tightly apposed to the PM. These conserved organelle junctions are thought to function as rapid and direct avenues for inter-organelle communication between the ER and PM. However, a major obstacle in the study of ER-PM contacts has been the identification of the factors that form and stabilize these structures. By trying to understand how Sac1, an ER anchored phosphoinositide phosphatase, regulates the phosphoinositide lipid phosphatidylinositol-4-phosphate (PI4P) on the PM, we have gained critical insight into ER-PM contact site formation and function. Here I present work that demonstrates Sac1 functions at ER-PM contacts to dephosphorylate PI4P on the PM. In the first part of my thesis, I uncovered a role for the yeast oxysterol binding protein homolog (Osh) family as critical regulators of PI4P metabolism. The Osh proteins are known PI4P effectors that localize to ER-organelle contact sites, including ERPM. We found that the entire Osh family regulates PI4P metabolism in vivo, through Sac1, and the Osh proteins stimulate Sac1 phosphatase activity in vitro. We propose that the Osh proteins serve as sensors of PI4P and activators of Sac1 at ER-PM contacts. In the second part of my thesis, I identified the tricalbin proteins (orthologs of the extended synaptotagmins), Ist2 (a member of the TMEM16 family of ion channels), and the yeast VAP proteins, Scs2/22 as ERPM tethering proteins. Strikingly, cells lacking all three families of tethering proteins display a dramatic retraction of the ER from the PM and an accumulation of cytoplasmic ER structures. These mutants also exhibit large accumulation of PI4P on the PM, consistent with a critical role for ER-PM contacts in regulating Sac1 function. Importantly, the generation of a strain lacking ER-PM junctions allowed us the opportunity to investigate novel functions for these structures. In addition to the defect in PI4P turnover, the unfolded protein response (UPR) was constitutively activated in cells lacking ER-PM junctions. This work provides a molecular mechanism for ER-PM contact site formation and identifies PI4P metabolism and ER homeostasis as new ER-PM contact site functions.