A new gene, STE50, which plays an essential role in cell differentiation in Saccharomyces cerevisiae was detected and analysed. STE50 expression is not cell type-specific and its expression in MATa and MAT alpha cells is unaffected by pheromones. When present on a high copy number plasmid, STE50 causes supersensitivity to alpha-pheromone, and increases the level of alpha-pheromone-induced transcription of FUS1 in haploid a cells. Mutants bearing either of the two gene disruptions, ste50-1 or ste50-2, are sterile and have a modulated sensitivity to alpha-pheromone. The overexpression of STE4 (G beta) in wild-type cells elicits a constitutive growth arrest signal, however this phenotype is suppressed by a C-terminal truncation mutation in STE50 (ste50-2). In contrast, the constitutive activation of the pheromone response pathway caused by disruption of GPA1 (G alpha) is not suppressed in ste50-2 mutants. The ste50-2 mutation partially suppresses the desensitisation defect of the sst2-1 mutation, and the resulting ste50-2 sst2-1 mutants restore fertility. Our results indicate that the ste50-2 mutant may have a defect in adaptation (hyperadaptation), and suggest a possible interaction of STE50-2 with the G alpha subunit of the G protein.