Rapamycin is a macrolide antifungal agent that exhibits potent immunosuppressive properties. In Saccharomyces cerevisiae, rapamycin sensitivity is mediated by a specific cytoplasmic receptor which is a homolog of human FKBP12 (hFKBP12). Deletion of the gene for yeast FKBP12 (RBP1) results in recessive drug resistance, and expression of hFKBP12 restores rapamycin sensitivity. These data support the idea that FKBP12 and rapamycin form a toxic complex that corrupts the function of other cellular proteins. To identify such proteins, we isolated dominant rapamycin-resistant mutants both in wild-type haploid and diploid cells and in haploid rbp1::URA3 cells engineered to express hFKBP12. Genetic analysis indicated that the dominant mutations are nonallelic to mutations in RBP1 and define two genes, designated DRR1 and DRR2 (for dominant rapamycin resistance). Mutant copies of DRR1 and DRR2 were cloned from genomic YCp50 libraries by their ability to confer drug resistance in wild-type cells. DNA sequence analysis of a mutant drr1 allele revealed a long open reading frame predicting a novel 2470-amino-acid protein with several motifs suggesting an involvement in intracellular signal transduction, including a leucine zipper near the N terminus, two putative DNA-binding sequences, and a domain that exhibits significant sequence similarity to the 110-kDa catalytic subunit of both yeast (VPS34) and bovine phosphatidylinositol 3-kinases. Genomic disruption of DRR1 in a mutant haploid strain restored drug sensitivity and demonstrated that the gene encodes a nonessential function. DNA sequence comparison of seven independent drr1dom alleles identified single base pair substitutions in the same codon within the phosphatidylinositol 3-kinase domain, resulting in a change of Ser-1972 to Arg or Asn. We conclude either that DRR1 (alone or in combination with DRR2) acts as a target of FKBP12-rapamycin complexes or that a missense mutation in DRR1 allows it to compensate for the function of the normal drug target.