Many fungi exist either in “yeast” form (as single cells) or as pseudohyphal/filamentous form (as multi-cellular structures). These fungi go through the dimorphic transition in response to specific nutritional cues. In fact, many of the fungal pathogens exhibit virulence when they exist in pseudohyphal form. It was reported in 1992, that yeast form of S.cerevisiae (baker’s yeast) can be induced to put forth pseudohypahae under specific nutritional conditions. During this transition, S.cerevisiae cells (a) switch from bipolar to unipolar budding (b) get elongated (c) express floculin, a cell wall glycoprotein termed as Flo11 protein, which helps the cells to remain attached to the parent cell. FLO11 promoter is one of the largest promoters in yeast (2.5 kb), Consistence with this, it receives many input signals. Because it is repressed in presence of sufficient glucose and nitrogen, one would have expected that pseuohyphal differentiation to occur in low glucose and low nitrogen. But what has been reported is that pseudohyphal differentiation occurs in response to limiting nitrogen availability in presence of sufficient glucose. We investigated this apparent paradox and demonstrated that in contrast to what has been reported, pseudohyphal differentiation occurs due to C and N2 limitation. This observation allowed us to identify the signaling mechanisms that would not have been possible otherwise. Interestingly, we demonstrate that mutations that cause defective pseudohyphal differentiation can be complemented by the corresponding orthologues from D. discoidium. In fact, the key proteins that respond to nutritional cues in yeast are highly conserved from yeast to humans. Above observations support the view that probably nutritional limitation could have played a decisive role in the evolution of multicellularity. Based on the above, I propose that understanding the molecular basis of the transition between the two modes of life style could be crucial in obtaining insights into the origin of cancer.