In both prokaryotes and eukaryotes nonsense mutations in a gene can enhance the decay rate of the mRNA transcribed from the gene, a phenomenon described as nonsense-mediated mRNA decay. In yeast, the products of the UPF1 and UPF3 genes are required for this decay pathway, and in this report we focus on the identification and characterization of additional factors required for rapid decay of nonsense-containing mRNAs. We present evidence that the product of the UPF2 gene is a new factor involved in this decay pathway. Mutation of the UPF2 gene or deletion of it from the chromosome resulted in stabilization of nonsense-containing mRNAs, whereas the decay of wild-type transcripts was not affected. The UPF2 gene was isolated, and its transcript was characterized. Our results demonstrate that the UPF2 gene encodes a putative 126.7-kD protein with an acidic region at its carboxyl terminus (-D-E)n found in many nucleolar and transcriptional activator proteins. The UPF2 transcript is 3600 nucleotides in length and contains an intron near its 5' end. The UPF2 gene is dispensable for vegetative growth, but upf2 delta strains were found to be more sensitive to the translational elongation inhibitor cycloheximide than UPF2+. A genetic analysis of other alleles proposed to be involved in nonsense-mediated mRNA decay revealed that the UPF2 gene is allelic to the previously identified sua1 allele, a suppressor of an out-of-frame ATG insertion shown previously to reduce translational initiation from the normal ATG of the CYC1 gene. In addition, we demonstrate that another suppressor of this cyc1 mutation, sua6, is allelic to upf3, a previously identified lesion involved in nonsense-mediated mRNA decay.