In a genetic selection for Saccharomyces cerevisiae genes involved in transcription start site specification, two mutant genes which restore alcohol dehydrogenase activity to a functionally defective S. pombe ADH gene were recovered. Examination of S. pombe ADH initiation sites showed that mutations in the SHI gene shift the location of the transcription initiation window closer to TATA. The shi mutant also affected initiation site selection for two S. cerevisiae genes that were tested. For H2B mRNA, initiation occurred in the shi mutant at a series of initiation sites located 43 to 80 bp 3' of the histone H2B TATA sequence and at the usual initiation sites 102 and 103 bp downstream of the TATA sequence. Weakly used initiation sites ranging from 51 to 80 bp downstream of the TATA sequence were observed for the S. cerevisiae ADH1 gene in shi strains, in addition to the normal ADH1 initiation sites 89 and 99 bp from the TATA sequence. Restoration of function to the defective S. pombe ADH gene occurs only when this gene contains a TATA sequence; a single-base-pair TATA-to-TAGA change is sufficient to prevent this restoration of function. Genetic mapping placed the SHI locus on the left arm of chromosome VII, 22.3 centimorgans from cyh2; it does not correspond to any previously mapped gene.