Saccharomyces cerevisiae uses G protein-coupled receptors for signal transduction. We show that a fusion protein between the alpha-factor receptor (Ste2) and the Galpha subunit (Gpa1) transduces the signal efficiently in yeast cells devoid of the endogeneous STE2 and GPA1 genes. To evaluate the function of different domains of Galpha, a chimera between the N-terminal region of yeast Gpa1 and the C-terminal region of rat Gsalpha has been constructed. This chimeric Gpa1-Gsalpha is capable of restoring viability to haploid gpa1Delta cells, but signal transduction is prevented. This is consistent with evidence showing that the C-terminus of the homologous Galpha is required for receptor-G protein recognition. Surprisingly, a fusion protein between Ste2 and Gpa1-Gsalpha is able to transduce the signal efficiently. It appears, therefore, that the C-terminus of Galpha is mainly responsible for bringing the G protein into the close proximity of the receptor's intracellular domains, thus ensuring efficient coupling, rather than having a particular role in transmitting the signal. To confirm this conclusion, we show that two proteins interacting with each other (such as Snf1 and Snf4, or Ras and Raf), each of them fused either to the receptor or to the chimeric Galpha, allow efficient signal transduction.