The Kluyveromyces lactis toxin is a protein containing three subunits (alpha, beta and gamma) which causes sensitive yeast cells to arrest proliferation in the G1 phase of the cell cycle. Despite the toxin's complex structure, the gamma subunit appears to be the only component required for it to arrest proliferation since intracellular expression of the gamma polypeptide alone in a sensitive yeast strain mimics the effect of the exogenous native toxin. The toxin alpha subunit shows sequence similarity to a variety of chitinases and here we report that the toxin is a potent exochitinase. The exochitinase activity is absolutely required for its biological activity against sensitive Saccharomyces cerevisiae cells and allosamidin, a specific inhibitor of chitinases, abolishes the biological activity of the toxin. However, since the alpha subunit is not required for the G1 arrest induced by the toxin, the chitinase activity of the toxin cannot be directly responsible for the ultimate effect of the toxin and most likely plays a role in the initial interaction of the toxin with sensitive cells.