Alr1p is an integral plasma membrane protein essential for uptake of Mg2+ into yeast cells. Homologs of Alr1p are restricted to fungi and some protozoa. Alr1‐type proteins are distant relatives of the mitochondrial and bacterial Mg2+‐transport proteins, Mrs2p and CorA, respectively, with which they have two adjacent TM domains and a short Mg2+ signature motif in common. The yeast genome encodes a close homolog of Alr1p, named Alr2p. Both proteins are shown here to be present in the plasma membrane. Alr2p contributes poorly to Mg2+ uptake. Substitution of a single arginine with a glutamic acid residue in the loop connecting the two TM domains at the cell surface greatly improves its function. Both proteins are shown to form homo‐oligomers as well as hetero‐oligomers. Wild‐type Alr2p and mutant Alr1 proteins can have dominant‐negative effects on wild‐type Alr1p activity, presumably through oligomerization of low‐function with full‐function proteins. Chemical cross‐linking indicates the presence of Alr1 oligomers, and split‐ubiquitin assays reveal Alr1p–Alr1p, Alr2p–Alr2p, and Alr1p–Alr2p interactions. These assays also show that both the N‐terminus and C‐terminus of Alr1p and Alr2p are exposed to the inner side of the plasma membrane.