The plasma membrane delimits the cell, and its integrity is essential for cell survival. Lipids and proteins form domains of distinct composition within the plasma membrane. How changes in plasma membrane composition are perceived, and how the abundance of lipids in the plasma membrane is regulated to balance changing needs remains largely unknown. Here, we show that the Slm1/2 paralogues and the target of rapamycin kinase complex 2 (TORC2) play a central role in this regulation. Membrane stress, induced by either inhibition of sphingolipid metabolism or by mechanically stretching the plasma membrane, redistributes Slm proteins between distinct plasma membrane domains. This increases Slm protein association with and activation of TORC2, which is restricted to the domain known as the membrane compartment containing TORC2 (MCT; ref. ). As TORC2 regulates sphingolipid metabolism, our discoveries reveal a homeostasis mechanism in which TORC2 responds to plasma membrane stress to mediate compensatory changes in cellular lipid synthesis and hence modulates the composition of the plasma membrane. The components of this pathway and their involvement in signalling after membrane stretch are evolutionarily conserved.