Abstract Mutations in the SPT5 gene of Saccharomyces cerevisiae were isolated previously as suppressors of delta insertion mutations at HIS4 and LYS2. In this study we have shown that spt5 mutations suppress the his4-912 delta and lys2-128 delta alleles by altering transcription. We cloned the SPT5 gene and found that either an increase or a decrease in the copy number of the wild-type SPT5 gene caused an Spt- phenotype. Construction and analysis of an spt5 null mutation demonstrated that SPT5 is essential for growth, suggesting that SPT5 may be required for normal transcription of a large number of genes. The SPT5 DNA sequence was determined; it predicted a 116-kDa protein with an extremely acidic amino terminus and a novel six-amino-acid repeat at the carboxy terminus (consensus = S-T/A-W-G-G-A/Q). By indirect immunofluorescence microscopy we showed that a bifunctional SPT5-beta-galactosidase protein was located in the yeast nucleus. This molecular analysis of the SPT5 gene revealed a number of interesting similarities to the previously characterized SPT6 gene of S. cerevisiae. These results suggest that SPT5 and SPT6 act in a related fashion to influence essential transcriptional processes in S. cerevisiae.