Transcription of a regulatory gene, PHO81, in the phosphatase regulon of Saccharomyces cerevisiae is repressed by inorganic phosphate (Pi) in the medium via that same regulatory system. The activity of Pho81p, the product of PHO81, is also inhibited by a high concentration of Pi in the medium. Increased dosage of PHO86, a gene encoding a putative membrane protein associated with a Pi transporter complex, activates the Pi-inhibited Pho81p produced under the control of the GAL1 promoter. A new gene, PHO88/ YBR106w, has now been identified as a multicopy suppressor of the rAPase- phenotype of the cells caused by the Pi inhibition of Pho81p. The pho86 disruptant expressed rAPase activity in high-Pi medium, while the pho88 disruptant did not. The delta pho86 delta pho88 double disruption resulted in enhanced synthesis of rAPase under the high-Pi condition and conferred arsenate resistance on the cells than those in single disruptants of these genes. Its hydropathy profile and the results of an analysis of its cellular localization suggested that Pho88p is a membrane protein similar to Pho86p. Both disruption and high dosage of PHO88 or PHO86 resulted in reduced Pi uptake. These findings suggest that Pho88p is also involved in Pi transport and modulates Pho81p function together with Pho86p.