The yeast scERV1 gene is the first representative of a new emerging gene family. Its gene product is essential for the yeast cell and is involved in the biogenesis of mitochondria and the regulation of the cell cycle. Recently the general importance of the gene for the eukaryotic cell was shown by the identification of a structural and functional human homologue. The homologous mammalian ALR (augmenter of liver regeneration) genes from man, mouse and rat are important for different developmental stages of the organism as for example in spermatogenesis and the regeneration of damaged liver organs. Latest research identified an intron with an unusual 3' branch site in the 5' region of the yeast scERV1 gene. Analysis of the now available complete genome sequence from Saccharomyces cerevisiae identified a second yeast gene with homologies to scERV1 on chromosome 16. The corresponding gene product has a length of 196 amino acids similar to the 189 residues of the scERV1 protein and exhibits 30% identical amino acid residues in the highly conserved carboxy-terminal part of the polypeptides. Because of the structural similarities the new gene will be termed scERV2 from now on. For the scERV1 gene product it has just been shown that it is associated with yeast mitochondria. Analysis of the amino-terminal part of the putative scERV2 protein also identifies a typical leader sequence for import into mitochondria. The comparison of cDNA and genomic DNA from the scERV2 gene shows that no intron is present in this gene. To investigate the functional relation between the two yeast genes disruption experiments and complementation studies of mutants from scERV1 were performed. In addition the expression of messenger RNA under 15 different growth conditions was investigated by detailed Northern hybridization studies. Both genes show a complex and distinct expression pattern for their transcripts and are highly regulated under different physiological conditions. Moreover correct and efficient splicing of the transcript from the scERV1 gene was found to vary with the physiological state of the yeast cell, as further verified by reverse transcription-polymerase chain reaction analysis of transcripts from galactose-grown yeast cells.