In Saccharomyces cerevisiae, entry into mitosis requires activation of the cyclin-dependent kinase Cdc28 in its cyclin B (Clb)-associated form. Clb-bound Cdc28 is susceptible to inhibitory tyrosine phosphorylation by Swe1 protein kinase. Swe1 is itself negatively regulated by Hsl1, a Nim1-related protein kinase, and by Hsl7, a presumptive protein-arginine methyltransferase. In vivo all three proteins localize to the bud neck in a septin-dependent manner, consistent with our previous proposal that formation of Hsl1-Hsl7-Swe1 complexes constitutes a checkpoint that monitors septin assembly. We show here that Hsl7 is phosphorylated by Hsl1 in immune-complex kinase assays and can physically associate in vitro with either Hsl1 or Swe1 in the absence of any other yeast proteins. With the use of both the two-hybrid method and in vitro binding assays, we found that Hsl7 contains distinct binding sites for Hsl1 and Swe1. A differential interaction trap approach was used to isolate four single-site substitution mutations in Hsl7, which cluster within a discrete region of its N-terminal domain, that are specifically defective in binding Hsl1. When expressed in hsl7Delta cells, each of these Hsl7 point mutants is unable to localize at the bud neck and cannot mediate down-regulation of Swe1, but retains other functions of Hsl7, including oligomerization and association with Swe1. GFP-fusions of these Hsl1-binding defective Hsl7 proteins localize as a bright perinuclear dot, but never localize to the bud neck; likewise, in hsl1Delta cells, a GFP-fusion to wild-type Hsl7 or native Hsl7 localizes to this dot. Cell synchronization studies showed that, normally, Hsl7 localizes to the dot, but only in cells in the G1 phase of the cell cycle. Immunofluorescence analysis and immunoelectron microscopy established that the dot corresponds to the outer plaque of the spindle pole body (SPB). These data demonstrate that association between Hsl1 and Hsl7 at the bud neck is required to alleviate Swe1-imposed G2-M delay. Hsl7 localization at the SPB during G1 may play some additional role in fine-tuning the coordination between nuclear and cortical events before mitosis.