Phosphorylation of the alpha subunit of eukaryotic translation initiation factor 2 (eIF-2 alpha) impairs translation initiation by inhibiting the guanine nucleotide exchange factor for eIF-2, known as eIF-2B. In Saccharomyces cerevisiae, phosphorylation of eIF-2 alpha by the protein kinase GCN2 specifically stimulates translation of GCN4 mRNA in addition to reducing general protein synthesis. We isolated mutations in several unlinked genes that suppress the growth-inhibitory effect of eIF-2 alpha phosphorylation catalyzed by mutationally activated forms of GCN2. These suppressor mutations, affecting eIF-2 alpha and the essential subunits of eIF-2B encoded by GCD7 and GCD2, do not reduce the level of eIF-2 alpha phosphorylation in cells expressing the activated GCN2c kinase. Four GCD7 suppressors were shown to reduce the derepression of GCN4 translation in cells containing wild-type GCN2 under starvation conditions or in GCN2c strains. A fifth GCD7 allele, constructed in vitro by combining two of the GCD7 suppressors mutations, completely impaired the derepression of GCN4 translation, a phenotype characteristic of deletions in GCN1, GCN2, or GCN3. This double GCD7 mutation also completely suppressed the lethal effect of expressing the mammalian eIF-2 alpha kinase dsRNA-PK in yeast cells, showing that the translational machinery had been rendered completely insensitive to phosphorylated eIF-2. None of the GCD7 mutations had any detrimental effect on cell growth under nonstarvation conditions, suggesting that recycling of eIF-2 occurs efficiently in the suppressor strains. We propose that GCD7 and GCD2 play important roles in the regulatory interaction between eIF-2 and eIF-2B and that the suppressor mutations we isolated in these genes decrease the susceptibility of eIF-2B to the inhibitory effects of phosphorylated eIF-2 without impairing the essential catalytic function of eIF-2B in translation initiation.