Transcription by RNA polymerase II is impeded by the nucleosomal organization of DNA; these negative effects are modulated at several stages of nucleosomal DNA transcription by FACT, a heterodimeric transcription factor. At promoters, FACT facilitates the binding of TATA-binding factor, while during transcription elongation FACT mediates the necessary destabilization of nucleosomes and subsequent restoration of nucleosome structure in the wake of the transcription elongation complex. Altered FACT activity can impair the fidelity of transcription initiation and affect transcription patterns. Using reporter genes we have identified new mutant versions of the Spt16 subunit of yeast FACT with dominant negative effects on the fidelity of transcription initiation. Two of these spt16 mutant alleles also affect cell integrity. Cells relying on these spt16 mutant alleles display sorbitol-remediated temperature sensitivity, altered sensitivity to detergent, and abnormal morphologies, and are further inhibited by the ssd1-d mutation. The overexpression of components of protein kinase C (Pkc1) signaling diminishes this spt16 ssd1-d temperature sensitivity, whereas gene deletions eliminating components of Pkc1 signaling further impair these spt16 mutant cells. Thus, the FACT subunit Spt16 and Pkc1 signaling have an overlapping essential function, with an unexpected role for FACT in the maintenance of cell integrity.