The 23.5 kd protein product of the ras-related YPT1 gene of S. cerevisiae was found to be essential for cell growth. The loss of YPT1 function, studied in cells with the YPT1 gene on chromosome VI regulated by the galactose-inducible GAL10 promoter, led to arrested cells that were multibudded and exhibited a complete disorganization of microtubules and an apparent loss of nuclear integrity. The YPT protein binds GTP specifically. GTP binding of the protein is essential for its intracellular function. The Asn121----IIe substitution, generated by site-directed mutagenesis, had a dominant lethal phenotype, the expression of the mutant protein led to binucleated cells and abnormal spindles. In contrast to the S. cerevisiae RAS1 and RAS2 gene products, the YPT protein seems to be involved, directly or indirectly, in microtubule organization and function.