Constructing gene regulatory networks is crucial to unraveling the genetic architecture of complex traits and to understanding the mechanisms of diseases. On the basis of gene expression and single nucleotide polymorphism data in the yeast, we constructed gene regulatory networks using a two-stage penalized least squares method. A large system of structural equations via optimal prediction of a set of surrogate variables was established at the first stage, followed by consistent selection of regulatory effects at the second stage. Using this approach, we identified subnetworks that were enriched in gene ontology categories, revealing directional regulatory mechanisms controlling these biological pathways. Our mapping and analysis of expression-based quantitative trait loci uncovered a known alteration of gene expression within a biological pathway that results in regulatory effects on companion pathway genes in the phosphocholine network. In addition, we identify nodes in these gene ontology-enriched subnetworks that are coordinately controlled by transcription factors driven by trans-acting expression quantitative trait loci.