Preparations of intact trehalose synthase contain three polypeptides with molecular masses of 56, 102 and 123 kDa. We have cloned the genes TSS1 and TSL1 coding for the 56- and 123-kDa subunits, respectively. These genes are located on chromosomes II (TSS1) and XIII (TSL1). The TSS1 gene was found to be identical with CIF1, a gene required for normal growth on glucose. The product of the entire TSS1 gene exhibits 37% identity with a 502-amino-acid stretch from the middle of the TSL1 product. Disruption of the TSS1 gene in yeast eliminates both trehalose 6-phosphate synthase (Tre6P synthase) and trehalose 6-phosphate phosphatase (Tre6Pase) activities, and reintroduction of this gene restores these activities. Transformation of Escherichia coli with TSS1 increases its Tre6P synthase activity. Specific proteolytic degradation of the 123-kDa polypeptide from the N-terminus greatly influences the Tre6P synthase activity, decreasing its inhibition by phosphate and activatability by fructose 6-phosphate but has little effect on the Tre6Pase activity. These results suggest that this N-terminal part confers regulatory properties upon the Tre6P synthase activity.