In Yarrowia lipolytica, the transcription factor Rim101p mediates both pH regulation and control of mating and sporulation. Like its homologues PacC of Aspergillus nidulans and Rim101p of Saccharomyces cerevisiae, Y1Rim101p is activated by proteolytic C-terminal processing, which occurs in response to a signal transduced by a pathway involving several PAL gene products. We report here the cloning and sequencing of two of these genes, PAL2 and PAL3. PAL2 encodes a putative 632-residue protein with six possible transmembrane segments, which differs from the transmembrane proteins Rim9p of S. cerevisiae and Pall of A. nidulans, but is homologous to A. nidulans Pa1H and to the product of the ORF YNL294c, a predicted polypeptide of unknown function in S. cerevisiae. PAL3 encodes an 881-residue polypeptide that is homologous to PalF of A. nidulans and to a newly identified putative polypeptide of S. cerevisiae. Both PAL2 and PAL3 are expressed constitutively, regardless of ambient pH. Mutations in these genes affect growth at alkaline pH and sporulation in both Y. lipolytica and in S. cerevisiae. They affect invasiveness of haploid strains in S. cerevisiae only, and conjugation in Y. lipolytica only. These results highlight the conservation of the Pal pathway initially described in A. nidulans.