The Na؉ /H ؉ antiporter Nha1p of Saccharomyces cerevisiae plays an important role in maintaining intracellular pH and Na ؉ homeostasis. Nha1p has a two-domain structure composed of integral membrane and hydrophilic tail regions. Overexpression of a peptide of ϳ40 residues (C1؉C2 domains) that is localized in the juxtamembrane area of its cytoplasmic tail caused cell growth retardation in highly saline conditions, possibly by decreasing Na ؉ /H ؉ antiporter activity. A multicopy suppressor gene of this growth retardation was identified from a yeast genome library. The clone encodes a novel membrane protein denoted as COS3 in the genome data base. Overexpression or deletion of COS3 increases or decreases salinity-resistant cell growth, respectively. However, in nha1⌬ cells, overexpression of COS3 alone did not suppress the growth retardation. Cos3p and a hydrophilic portion of Cos3p interact with the C1؉C2 peptide in vitro, and Cos3p is co-precipitated with Nha1p from yeast cell extracts. Cos3p-GFP mainly resides at the vacuole, but overexpression of Nha1p caused a portion of the Cos3p-GFP proteins to shift to the cytoplasmic membrane. These observations suggest that Cos3p is a novel membrane protein that can enhance salinity-resistant cell growth by interacting with the C1؉C2 domain of Nha1p and thereby possibly activating the antiporter activity of this protein.