Sugar alcohols (polyols) exist widely in nature. While some specific sugar alcohol phosphatases are known, there is no known phosphatase for some important sugar alcohols (e.g., sorbitol-6-phosphate). Using liquid chromatography-mass spectrometry-based metabolomics, we screened yeast strains with putative phosphatases of unknown function deleted. We show that the yeast gene YNL010W, which has close homologues in all fungi species and some plants, encodes a sugar alcohol phosphatase. We term this enzyme, which hydrolyzes sorbitol-6-phosphate, ribitol-5-phosphate, and (d)-glycerol-3-phosphate, polyol phosphatase 1 or PYP1. Polyol phosphates are structural analogs of the enediol intermediate of phosphoglucose isomerase (Pgi). We find that sorbitol-6-phosphate and ribitol-5-phosphate inhibit Pgi and that Pyp1 activity is important for yeast to maintain Pgi activity in the presence of environmental sugar alcohols. Pyp1 expression is strongly positively correlated with yeast growth rate, presumably because faster growth requires greater glycolytic and accordingly Pgi flux. Thus, yeast express the previously uncharacterized enzyme Pyp1 to prevent inhibition of glycolysis by sugar alcohol phosphates. Pyp1 may be useful for engineering sugar alcohol production.