It is well established that higher eukaryotes use alternative splicing to increase proteome complexity. In contrast, Saccharomyces cerevisiae, a single-cell eukaryote, conducts predominantly regulated splicing through retention of nonfunctional introns. In this article we describe our discovery of a functional intron in the PTC7 (YHR076W) gene that can be alternatively spliced to create two mRNAs that code for distinct proteins. These two proteins localize to different cellular compartments and have distinct cellular roles. The protein translated from the spliced mRNA localizes to the mitochondria and its expression is carbon-source dependent. In comparison, the protein translated from the unspliced mRNA contains a transmembrane domain, localizes to the nuclear envelope, and mediates the toxic effects of Latrunculin A exposure. In conclusion, we identified a definitive example of functional alternative splicing in S. cerevisiae that confers a measurable fitness benefit. I N higher eukaryotes alternative splicing is pervasive; in humans the majority of genes are alternatively spliced to form multiple proteins (Modrek et al. 2001;Johnson et al. 2003). In contrast, only 5% of the genes in Saccharomyces cerevisiae contain introns and .95% of those intron-containing genes possess only a single intron (Nash et al. 2007). The simple architecture of the yeast genome constrains its ability to utilize alternative splicing and has encouraged the view that alternative splicing is absent in S. cerevisiae. Currently no conclusive examples of functional alternative splicing exist; most confirmed instances of alternative splicing in yeast downregulate gene expression, a process that is often referred to as ''regulated splicing.'' In this process, nonfunctional introns are not spliced out of the transcript and premature stop codons are included in the fully processed mRNA. The stop codons activate the nonsense-mediated decay (NMD) pathway and the mRNA is degraded before it can be translated (Gonzalez et al. 2001).The transition from vegetative growth to meiosis illustrates how regulated splicing improves yeast fitness. DNA breakage and recombination could be toxic during vegetative growth, and therefore entrance into meiosis is tightly controlled. Consequently, all 13 meiosis-specific introncontaining genes are regulated post-transcriptionally with splicing repressed during vegetative growth and induced during sporulation (Engebrecht et al. 1991;Nakagawa and Ogawa 1999;Juneau et al. 2007). Other examples of regulated splicing include YRA1 and MTR2 (RNA export) (Preker et al. 2002;Parenteau et al. 2008) and RPL30 (ribosomal) (Li et al. 1996).In contrast to regulated splicing, there is only one example in S. cerevisiae where splicing results in the expression of multiple proteins, SRC1 (Grund et al. 2008). SRC1 contains a single intron located at the 39 end of the pre-mRNA. The intron has two alternative 59-splice sites (Rodriguez-Navarro et al. 2002). Splicing at the most highly conserved 59-splice site (Bon et al. 2003) ...