The Sup35p protein of yeast Saccharomyces cerevisiae is a homologue of the polypeptide chain release factor 3 (eRF3) of higher eukaryotes. It has been suggested that this protein may adopt a specific self-propagating conformation, similar to mammalian prions, giving rise to the [psi+] nonsense suppressor determinant, inherited in a non-Mendelian fashion. Here we present data confirming the prion-like nature of [psi+]. We show that Sup35p molecules interact with each other through their N-terminal domains in [psi+], but not [psi-] cells. This interaction is critical for [psi+] propagation, since its disruption leads to a loss of [psi+]. Similarly to mammalian prions, in [psi+] cells Sup35p forms high molecular weight aggregates, accumulating most of this protein. The aggregation inhibits Sup35p activity leading to a [psi+] nonsense-suppressor phenotype. N-terminally altered Sup35p molecules are unable to interact with the [psi+] Sup35p isoform, remain soluble and improve the translation termination in [psi+] strains, thus causing an antisuppressor phenotype. The overexpression of Hsp104p chaperone protein partially solubilizes Sup35P aggregates in the [psi+] strain, also causing an antisuppressor phenotype. We propose that Hsp104p plays a role in establishing stable [psi+] inheritance by splitting up Sup35p aggregates and thus ensuring equidistribution of the prion-like Sup35p isoform to daughter cells at cell divisions.