A gene, SIT4, was identified as corresponding to a serine/threonine protein phosphatase and when overexpressed confers lithium tolerance in galactose medium to the budding yeast Saccharomyces cerevisiae. This gene has been previously identified as a regulator of the cell cycle and involved in nitrogen sensing. It is shown that the transcription levels of SIT4 are induced by low concentrations of Li(+) in a time-dependent manner. Na(+) and K(+) at high concentrations, but not sorbitol, also induce transcription. As a response to Na(+) or Li(+) stress, yeast cells lower the intracellular K(+) content. This effect is enhanced in cells overexpressing SIT4, which also increase (86)Rb efflux after the addition of Na(+) or Li(+) to the extracellular medium. Another feature of SIT4-overexpressing cells is that they maintain a more alkaline pH of 6.64 compared with 6.17 in the wild type cells. It has been proposed that the main pathway of salt tolerance in yeast is mediated by a P-type ATPase, encoded by PMR2A/ENA1. However, our results show that in a sit4 strain, expression of ENA1 is still induced by monovalent cations, and overexpression of SIT4 does not alter the amount of ENA1 transcript. These results show that SIT4 acts in a parallel pathway not involving induction of transcription of ENA1 and suggest a novel function for SIT4 in response to salt stress.