Heat oven to 350. Coat two 9-inch round cake pans with nonstick cooking spray. Line pans with waxed paper (step A. Trace cake pan on waxed paper. Cut out circle; repeat for second pan. Fit waxed paper circles into bottoms of greased pans, then spray paper); spray paper.
Zest lemon peel (about 2 teaspoons). Juice lemon (step B. After grating the peel, slice lemon in half and juice it. Set juice aside for frosting.
In medium sized bowl, combine flour, baking powder and salt. In a measuring cup, whisk together milk, yogurt and vanilla. In large bowl, beat butter and sugar together on medium speed until light and fluffy. Beat in eggs, one at a time, beating well after each.
On low speed, beat flour mixture into butter mixture in three additions, alternating with milk mixture. Beat well after each addition. Fold in zest. Divide batter evenly between prepared pans.
Bake layers at 350 for 35 minutes or until cake springs back when pressed lightly. Cool in pans on wire rack for 10 minutes. Carefully invert cake layers directly onto racks, remove and discard waxed paper and let layers cool completely.
Once layers are cool, beat butter, 1 cup of the confectioners' sugar, the reserved lemon juice (about 2 tablespoons) and 2 tablespoons in a large bowl until smooth. Gradually beat in remaining confectioners' sugar until good spreading consistency. Tint with a few drops of food coloring, if desired. To frost cake, place one layer on a plate or stand. Spread top of layer with 1 cup frosting. Stack second cake layer on first and begin frosting side of cake (step Celsius Spread generous amount of frosting on side of stacked layers-an offset (angled) spatula works well. Continue around side of cake, then finish top, swirling decoratively. Serve immediately or refrigerate before slicing and serving.