Mating pheromones, known as a and alpha-factors, arrest the division of cells of opposite mating types, alpha and a respectively, in Saccharomyces cerevisiae. I have cloned the DAC2 gene, which is required for both pheromone-induced division-arrest and cell-fusion during conjugation. The constructed dac2::LEU2 null mutation leads to defects in both pheromone-induced division-arrest and cell-fusion during conjugation; it also suppresses the growth defect caused by the gpa1 mutation (a mutation in the alpha subunit of the S. cerevisiae G protein). These results indicate that DAC2 may be the same gene as FUS3, which was recently isolated by Elion et al. (1990) as a gene essential for cell-fusion during conjugation. The dac2::LEU2 null mutant also showed morphological alterations in response to mating pheromones. I show here that the DAC2 product plays an essential role in both the division-arrest signalling pathway of the yeast pheromone response and in cell-fusion during conjugation.