To maintain cytosolic phosphate (Pi) homeostasis, excess Pi is stored in the vacuole mediated by the PHT5 vacuolar Pi transporter. Loss-of-function pht5 mutants increase cytosolic Pi but reduce total Pi accumulation. Inositol phosphate (InsP) is recognized as a Pi signaling molecule through binding to SYG1/Pho81/XPR1 (SPX) domain. PHT5 contains an N-terminal SPX domain (α1-6 helices) and a C-terminal major facilitator superfamily (MFS) domain with two helices (α7-8) in the between. Because the PHT5 protein level remains constant in response to Pi change, its activity is likely regulated post-translationally. Complementation analyses of pht5 mutants showed that mutations in the conserved residues of InsP binding sites in the SPX domain suppressed vacuolar Pi storage, demonstrating the importance of InsP binding in regulating PHT5 activity. Intriguingly, SPX-truncated PHT5 lost its activity, but further removal of α7-8 led to constitutive activation, suggesting α7-8 as a suppressor motif. α7-8 physical contact with the MFS domain regardless of cellular Pi status; however, the interaction between SPX and MFS depends on cellular Pi states. The fluorescence resonance energy transfer analysis revealed that InsP but not Pi triggers the conformation change of PHT5 in yeast cells. Structure prediction identified several amino acids forming hydrogen bonds connecting SPX to α7-8 and α7-8 to MFS. Site-directed mutagenesis on those amino acids abolished the InsP-induced conformational change. We proposed a working model in which the SPX domain senses the cytosolic InsP concentration and triggers the intra-molecular conformational change to modulate the MFS domain in transporting Pi into the vacuole.