NaCl-sensitive yeast mutants were isolated to identify genes essential for NaCl tolerance. Complementation of a mutant highly sensitive to Na+ and Li+ led to the isolation of the CNB1 gene. This gene encodes the regulatory subunit (CNB) of the Ca2+/calmodulin-dependent protein phosphatase calcineurin. Cells deficient in CNB accumulated Li+ due to reduced expression of ENA1, a gene encoding a P-type ATPase involved in Na+ and Li+ efflux. In addition, the K+ transport system of cnb1 delta cells was not converted to the high affinity state that facilitates better discrimination of K+ over Na+. Thus the cnb1 delta strain resembled a trk1 mutant. These results indicate that adaptation to NaCl stress in Saccharomyces cerevisiae requires a signal transduction pathway involving Ca2+ and protein phosphorylation-dephosphorylation. In this pathway, calcineurin would coordinate gene expression and activity of ion transporters to facilitate ion homeostasis.