Calcineurin is a Ca2؉ /calmodulin-regulated protein phosphatase that plays critical functional roles in T-cell activation and other Ca 2؉ -mediated signal transduction pathways in mammalian cells. In Saccharomyces cerevisiae, calcineurin regulates the transcription of several genes involved in maintaining ion homeostasis (PMC1, PMR1, and PMR2) and cell wall synthesis (FKS2). In this paper, we report the identification and characterization of 11 single amino acid substitutions in the yeast calcineurin catalytic subunit Cna1p. We show that six substitutions (R177G, F211S, S232F, D258V, L259P, and A262P) affect the stability of calcineurin and that two substitutions (V385D and M400R) disrupt the interaction between Cna1p and the calcineurin regulatory subunit Cnb1p. We also identify three mutations (S373P, H375L, and L379S) that are clustered between the catalytic and the calcineurin B subunit-binding domains. These mutations do not significantly affect the ability of Cna1p to interact with Cnb1p, calmodulin, or Fkb1p (FK506-binding protein). However, these residue substitutions dramatically affect calcineurin activity both in vitro and in vivo. Thus, by using a random mutagenesis approach, we have shown for the first time that the linker region of the calcineurin catalytic subunit, as defined by the Ser 373 , His 375 , and Leu 379 residues, is crucial for its function as a phosphatase.Calcineurin, also known as PP2B, is a Ser/Thr-specific protein phosphatase (1). Calcineurin is tightly regulated by Ca 2ϩ / calmodulin, and it plays critical functional roles in many calcium-mediated signal transduction pathways. For example, calcineurin is required during T-cell activation for the transcriptional regulation of interleukin 2 (IL2) and other cytokine genes (2, 3). In human T-cells, calcineurin directly binds to and dephosphorylates the transcription factor NFAT.1 The dephosphorylated NFAT then translocates from the cytosol to the nucleus and activates the transcription of IL2 and other cytokine genes required for T-cell activation and proliferation (4, 5). The immunosuppressive drugs FK506 and cyclosporin A, in association with their respective cellular receptor proteins FKBP12 and cyclophilin A, bind to calcineurin and inhibit its phosphatase activity (6), thus preventing the calcineurin-dependent transcriptional activation of cytokine genes and T-cell activation (7).In the budding yeast Saccharomyces cerevisiae, calcineurindeficient strains exhibit normal growth under standard conditions (8 -10). However, calcineurin function is required for cell viability under some specific growth conditions. For example, mutations that disrupt calcineurin function are lethal in combination with several mutations that impair cell wall synthesis, including fks1⌬ (11-13). FKS1 and FKS2 are a pair of homologous genes responsible for the synthesis of 1, 3-glucan (11, 12, 14), which is a glucose homopolymer. Since 1,3-glucan is an essential cell wall component, yeast cells require both the FKS1 and FKS2 genes for viability. In a fks...