DNA fragments containing structural characteristics found in Ser/Thr protein phosphatases were amplified by polymerase chain reaction from yeast genome. Amplification was carried out by using degenerate oligonucleotides encoding conserved sequences found in type 1, 2A, and 2B phosphatases. A 215-base pair amplification fragment was used to screen a size-selected library, and a positive clone was isolated and sequenced. Nucleotide sequencing revealed a 2076-base pair open reading frame encoding a 692-amino acid protein. The carboxyl half of the protein is structurally related to type 1 phosphatases and virtually identical with the sequence reported as PPZ1, whereas the amino-terminal half of the protein is unrelated to sequences found in other protein phosphatases. This region is very rich in Ser residues and presents a high number of basic amino acids. Therefore, the gene product, on the basis of its unique structure, would represent a novel class of protein phosphatase. The gene, which is located at chromosome XIII, is transcribed as a mRNA of about 2.7 kilobases, and the amount of message has been found to increase 3- to 4-fold during the culture. The product of the gene PPZ1 was identified by immunoblot analysis of cell extracts as a 75-kDa protein, and the amount of immunoreactive protein was increased in cells carrying multiple copies of the gene. Disruption of the gene resulted in viable cells, with no detectable phenotypic change, indicating that the gene is not essential for growth.