In the context of the cooperative project for functional analysis of novel genes uncovered during the systematic sequencing of the Saccharomyces cerevisiae genome, we deleted two paralogous ORFs: YIL153w and YPL152w. Based on the resulting phenotypes, the corresponding genes were named RRD1 and RRD2, respectively. Rrd proteins show significant similarity to the human phosphotyrosyl phosphatase activator (PTPA). Both single mutants, rrd1delta and rrd2delta, were viable. Deletion of RRD1 caused pleiotropic phenotypes under a wide range of conditions, including sensitivity to Ca2+, vanadate, ketoconazole, cycloheximide and Calcofluor white, and resistance to caffeine and rapamycin. The only phenotypes found for rrd2delta - resistance to caffeine and rapamycin - were weaker than the corresponding phenotypes of rrd1delta. The double mutant rrd1,2delta was inviable on rich glucose medium, but could grow in the presence of an osmotic stabilizer. The rrd1,2delta mutant was partially rescued by inactivation of HOG1 or PBS2, suggesting an interaction between the RRD genes and the Hog1p signal transduction pathway. Introduction of slt2delta into the rrd1,2delta background improved the growth of rrd1,2delta on sorbitol-containing medium, indicating that the Rrd proteins also interact with the Slt2p/Mpk1p signaling pathway. Suppression of the lethal phenotype of the rrd1,2delta mutant by overexpression of PPH22 suggested that the products of the RRD genes function positively with catalytic subunits of PP2A. The synthetic lethality was also suppressed by the "viable" allele (SSD1-v1) of the SSD1 gene.