FHL1 encodes a polypeptide closely related to the fork head protein family of transcriptional activators. Deleting this gene leads to a slow-growth phenotype with impaired rRNA maturation. IFH1 (located on chromosome IV) was isolated as a dosage-dependent suppressor partially correcting the growth defect of the fhl1 deletion. It codes for a highly hydrophilic protein with a predicted molecular weight of 122 kDa and a pI of 4.8, that is very rich in charged residues (mostly acidic) but otherwise unrelated to any known protein. Carboxy-terminal deletions removing the last third of the protein lead to a leaky growth phenotype with impaired rRNA maturation, as in the case of the fhl1 deletion. A full deletion of IFH1 is lethal, but growth was restored in a strain deleted for both IFH1 and FHL1. Thus, Ifh1p is essential for growth, but only in the presence of a functional Fhp1p protein. Conversely, its overexpression by increased gene dosage partially compensates for the genetic inactivation of Fhl1p. These data suggest a direct interaction between the Fhl1p and Ifh1p proteins, and are consistent with a model where Fhl1p is converted from a transcriptional repressor to an activator on binding of Ifh1p.