Cadmium (Cd) is a potent toxic element used in several industries and in the process contaminates air, soil, and water. Exposure of Saccharomyces cerevisiae to Cd increases the major phospholipids, and profound increase was observed in phosphatidylethanolamine (PE). In yeast, there are four different pathways contributing to the biosynthesis of PE, and contribution to PE pool through phosphatidylserine decarboxylase2 (psd2) is not significant in normal conditions. Upon Cd exposure, psd2Δ strain showed a significant decrease in major phospholipids including PE. When exposed to Cd, wild-type (WT) cells depicted an increase in ER stress and autophagy, whereas in psd2, ER stress was noted but autophagy process was impaired. The supplementation of ethanolamine did not overcome the Cd stress and also the autophagy process, whereas overexpression of PSD2 in psd2Δ increased the cellular tolerance, PE levels, and the autophagy process against Cd stress. From our studies, we can suggest that PSD2 of S. cerevisiae has an important role in PE synthesis and in autophagy process under Cd stress.