Increases in the external osmolarity trigger a MAP kinase phosphorylation cascade in the yeast Saccharomyces cerevisiae known as the HOG pathway that leads to activation of the GPD1 and GPP2 genes encoding enzymes involved in the glycerol production (glycerol 3-phosphate dehydrogenase and glycerol 3-phosphatase, respectively). Glycerol is the main osmolyte accumulated in S. cerevisiae upon osmotic stress. We have cloned a gene named OSG3, osmosensitive glyceroldefective, by complementation of an osmosensitive mutant. Partial sequencing and search in the S. cerevisiae database revealed an open reading frame of 2697 nucleotides encoding a hypothetical 899 aa protein with no obvious homology to any known protein. Deletion of the OSG3 gene turned out to be lethal and tests on plates containing 5-flouroorotic acid indicated that the Osg3p is needed for vegetative growth of the cells. The original osg3-1 mutant showed defect in glycerol production at higher salinities, from 1.0-1.4 M NaCl, while moderate osmotic shock induced glycerol production to normal levels. The OSG3 gene on multicopy plasmid rescues the pbs2 and hog1 mutations. Northern analysis showed elevated levels of GPD1 transcript in the pbs2 with the OSG3 on multicopy plasmid. The GPP activity was also enhanced in these strains. These data indicate that the OSG3 gene functions downstream the HOG pathway.