When nuclear localization sequences (termed NLS) are placed at the N terminus of cytochrome c1, a mitochondrial inner membrane protein, the resulting hybrid proteins do not assemble into mitochondria when synthesized in the yeast Saccharomyces cerevisiae. Cells lacking mitochondrial cytochrome c1, but expressing the hybrid NLS-cytochrome c1 proteins, are unable to grow on glycerol since the hybrid proteins are associated primarily with the nucleus. A similar hybrid protein with a mutant NLS is transported to and assembled into the mitochondria. To identify proteins that might be involved in recognition of nuclear localization signals, we isolated conditional-lethal mutants (npl, for nuclear protein localization) that missorted NLS-cytochrome c1 to the mitochondria, allowing growth on glycerol. The gene corresponding to one complementation group (NPL1) encodes a protein with homology to DnaJ, an Escherichia coli heat shock protein. npl1-1 is allelic to sec63, a gene that affects transit of nascent secretory proteins across the endoplasmic reticulum. Rothblatt, J. A., R. J. Deshaies, S. L. Sanders, G. Daum, and R. Schekman. 1989. J. Cell Biol. 109:2641-2652. The npl1 mutants reported here also weakly affect translocation of preprocarboxypeptidaseY across the ER membrane. A normally nuclear hybrid protein containing a NLS fused to invertase and a nucleolar protein are not localized to the nucleus in npl1/sec63 cells at the nonpermissive temperature. Thus, NPL1/SEC63 may act at a very early common step in localization of proteins to the nucleus and the ER. Alternatively, by affecting ER and nuclear envelope assembly, npl1 may indirectly alter assembly of proteins into the nucleus.