Abstract: Lte1 is known as a regulator of mitotic progression in budding yeast. Here we demonstrate phosphorylation-dependent inhibition of polarized bud growth during G2/M by Lte1. Cla4 activity first localizes Lte1 to the polarity cap and thus specifically to the bud. This localization is a prerequisite for subsequent Clb-Cdk-dependent phosphorylation of Lte1 and its relocalization to the entire bud cortex. There, Lte1 interferes with activation of the small GTPases, Ras and Bud1. The inhibition of Bud1 prevents untimely polarization until mitosis is completed and Cdc14 phosphatase is released. Inhibition of Bud1 and Ras depends on Lte1's GEF-like domain, which unexpectedly inhibits these small G proteins. Thus, Lte1 has dual functions for regulation of mitotic progression: it both induces mitotic exit and prevents polarized growth during mitotic arrest, thereby coupling cell cycle progression and morphological development.