The Gal system of Saccharomyces cerevisiae is a paradigm for eukaryotic gene regulation. Expression of genes required for growth on galactose is regulated by the transcriptional activator Gal4. The activation function of Gal4 has been localized to 34 amino acids near the C terminus of the protein. The gal4D allele of GAL4 encodes a truncated protein in which only 14 amino acids of the activation domain remain. Expression of GAL genes is dramatically reduced in gal4D strains and these strains are unable to grow on galactose as the sole carbon source. Overexpression of gal4D partially relieves the defect in GAL gene expression and allows growth on galactose. A search for extragenic suppressors of gal4D identified recessive mutations in the SUG1 and SUG2 genes, which encode ATPases of the 19S regulatory complex of the proteasome. The proteasome is responsible for the ATP-dependent degradation of proteins marked for destruction by the ubiquitin system. It has been commonly assumed that effects of SUG1 and SUG2 mutations on transcription are explained by alterations in the proteolysis of gal4D protein. We have investigated this assumption. Surprisingly, we find that SUG1 and SUG2 alleles that are unable to suppress gal4D cause a larger increase in gal4D protein levels than do suppressing alleles. In addition, mutations in genes encoding subunits of the proteolytic 20S sub-complex of the proteasome increase the levels of gal4D protein but do not rescue its transcriptional activity. Therefore, an alteration in the proteolysis of gal4D by the proteasome cannot explain the effects of mutations in SUG1 and SUG2 on expression of GAL genes. These findings suggest that the 19S regulatory complex may play a more direct role in transcription.In the yeast Saccharomyces cerevisiae, expression of genes required for the metabolism of galactose is controlled by the positive regulator Gal4 and the negative regulator Gal80. Gal4 is a transcriptional activator with an N-terminal DNA binding domain and a C-terminal activation domain. Partial deletion of the activation domain of Gal4 in the gal4D allele leads to a dramatic loss in the ability to activate transcription of GAL genes. Using a reporter gene assay, the gal4D protein was found to activate transcription from the GAL1/10 promoter to ϳ4% of the level driven by wild-type Gal4 (1). The gal4D protein does not activate the GAL genes sufficiently to allow growth on galactose as the sole carbon source (1). Recessive mutations in SUG1 and SUG2 have been identified that partially restore the ability of gal4D to activate transcription (1-3). In strains carrying the sug1-1 or sug2-1 alleles, reporter gene activity was restored to ϳ55% and 70%, respectively (1, 4). Both the sug1-1 and sug2-1 alleles allow gal4D strains to grow on galactose as the sole carbon source (1, 3). In the work reported here we have investigated the mechanism for this suppression.Sug1 (1) and Sug2 (3) are members of the ATPases Associated with diverse cellular Activities (AAA) 1 family. Members of this family share ...