During development, animals usually undergo a rapid growth phase followed by a homeostatic stage when growth has ceased. The increase in cell size and number during the growth phase requires a large amount of lipids; while in the static state, excess lipids are usually stored in adipose tissues in preparation for nutrient-limited conditions. How cells coordinate growth and fat storage is not fully understood. Through a genetic screen we identified Drosophila melanogaster CDP-diacylglycerol synthetase (CDS/CdsA), which diverts phosphatidic acid from triacylglycerol synthesis to phosphatidylinositol (PI) synthesis and coordinates cell growth and fat storage. Loss of CdsA function causes significant accumulation of neutral lipids in many tissues along with reduced cell/organ size. These phenotypes can be traced back to reduced PI levels and, subsequently, low insulin pathway activity. Overexpressing CdsA rescues the fat storage and cell growth phenotypes of insulin pathway mutants, suggesting that CdsA coordinates cell/tissue growth and lipid storage through the insulin pathway. We also revealed that a DAG-to-PE route mediated by the choline/ethanolamine phosphotransferase Bbc may contribute to the growth of fat cells in CdsA RNAi.